Britain’s startup sector appears to be undeterred by Brexit worries, with the latest research showing that more than $1 billion was invested into startups in the first quarter of the year.
According to KPMG’s latest report, Europe also performed better in the final quarter of 2016 of than both Asia and the Americas, despite the geopolitical uncertainty facing a number of EU member states. Being a smaller region Europe had the upper hand, but its “growing diversity of technology ecosystems” remains a strong factor for its resilience.
Despite the fact that worldwide venture capital activity declined by 24 percent in 2016, from 17,992 completed financings in 2015 to 13,665, Europe experienced a 7-year high in VC fundraising activity with $10.5 billion raised over 62 closed funds.
The UK performed particularly well, despite worries that Britain’s exit from the European Union would deter investors. Biotech and life sciences in particular were attractive, with both Currencycloud and Funding Circle raising serious cash at the beginning of this year.
KPMG’s co-head of tech growth Patrick Imbach commented:
“UK VC investment activity is at robust levels and this should be a cause for optimism in 2017.”
“We’ve seen very strong fundraising from Currencycloud, Funding Circle and Atlas Genetics. Tech giants are also clearly confident in post-Brexit Britain with Apple and Snap having chosen London for their international headquarters,” Imbach continued.
This follows a new report from Goldman Sachs showing that investor interest in the UK is continuing to grow. Venture capital funds available stood at more than $121 billion in 2017, raising more than $64 billion in global capital last year. This figure is up from $55 billion in 2015, as investors continue to pour money into the latest startups.
However London-based venture capital firm 83North has taken a less positive stance, warning recently that unless the UK government commits to the tech sector ahead of Article 50 negotiations, venture capital firms will be forced to focus outside of the UK.
Laurel Bowden, a partner at the firm, told CityAM: “As we look to the future, the UK’s exit from the EU will accelerate activity in European tech hubs outside the UK. We believe this presents a big opportunity for venture funds, like 83North, that are already well-established in the wider European region.”