The UK continues to be attractive to investors despite its decision to leave the European Union, with its startup scene growing faster than ever. In 2016, it drew more venture-capital investment in 2016 than the next four European countries combined.
More and more global venture capital firms have been looking to invest in UK businesses; this has prompted concerns that US and Asian investors stand to benefit the most from Europe’s unprecedented success in tech, after it was found capital from those regions account for 76 percent of late stage tech investment.
So which UK-based venture capital firms should British startups look to for investment?
Passion Capital
Arguably one of the most famous firms in the industry, Eileen Burbidge’s Passion Capital has a large focus on UK companies. It has a total of £86 million in funds under management and always invests at the seed stage – the average seed investment from the company is less than £200,000.
Their particular interests include fintech, cyber security and health tech, but are open to all sectors. Most recently, Passion Capital led a funding round of a further £8 million for PropTech firm Nested, alongside Tim Bunting, a partner at Balderton Capital and Rocket Internet’s venture arm Global Founders Capital. Nested launched in January 2016 and enables homeowners to sell their properties.
Angel CoFund
London-based AngelCo Fund focus solely on UK companies, or companies with a UK head office. With £100 million under management, investments made by the company range between £100,000 and £1m alongside angel investors and other co-investors.
The fund’s portfolio is evenly split between life-sciences companies, digital media and software and other companies including cleantech and food and drink.
The fund recently invested in Belfast-based Brainwave Bank alongside Innovate UK and Innovate Northern Ireland.
MMC Ventures
The young team at MMC Ventures have £135 million under management with a focus on UK-based companies, with ‘global ambition’. Most of their portfolio have their HQ in the UK but have offices all over the world including New York, Madrid and Kuala Lumpur.
MMC are another company who invest in startups during their early stages, typically Series A and follow-on to Series B and, as a firm, take a positive view of the British startup scene despite worries that Brexit may have a negative impact on the sector.
MMC’s managing partner Bruce Macfarlane told Growth Business that he thought Brexit “would not affect the tech sector, even if it’s a hard Brexit.”
“The only thing we worry about is recruiting talented people outside the UK and bringing them, so were hoping the government will be sensible about that. There’s so much talent in the UK (tech sector), we want to be part of that journey”, he added.
Smedvig Capital
With $600 million under management, Smedvig Capital are one of the largest firms on the list. The group have money to spend; they target 3-4 deals per year at £7.5 million. Their focus is on ‘UK based technology businesses with at least £1 million of run rate revenue’, growing quickly and needing some serious capital to grow faster.