Venture Capital (VC) investors pumped more than $49m into Northern startup businesses between July and September, up by nearly $10m on the same quarter last year, according to Venture Pulse 2018, a quarterly report on global VC trends published by KPMG Enterprise.
A total of 22 businesses from the region saw investment from VC investors in Q3 2018, out of 200 deals completed across the UK.
The year-on-year increase in investment value follows an active first six months of the year for the North, when $144m worth of VC investment was shared by 47 businesses across the region.
VC investments were spread across the North between July and September, with notable hubs in cities such as Manchester, Sheffield and Newcastle. Active investors include the Northern Powerhouse Investment Fund and Mercia Technologies, each with multiple multi-million-pound deals completed.
The largest regional investment was the $13m late-stage VC funding for Cheshire-based Blueberry Therapeutics, which closed in August, followed by investments for Parckcloud (Manchester), Econic Technologies (Tyne and Wear) and Duffel (Sheffield).
The positive picture for the North was mirrored nationally in Q3, with VCs investing a total of £1.41bn into UK startups, up on £1.31bn raised between July and September 2017.
Graham Pearce, KPMG’s head of technology in the North, commented: “The third quarter of the year is traditionally a slower period for investment. Add to this the shadow of Brexit uncertainty, and it’s great to see the amount of VC investment in the North’s thriving startup and scaleup sector up on the same period a year ago.
“Manchester continues to lead the charge, with the highest number of VC investments in Q3, matching the rate of its burgeoning technology community. But it is not alone. With thousands of new tech companies born each year across the North, the sector is now a crucial component of the wider regional economy and an important part of its international investment appeal.”
According to Venture Pulse 2018, fintech, automotive and biotech are regarded as key investment priorities in the UK. Healthtech continues to perform particularly strongly in the North, with significant investments for Newcastle-based Newcells Biotech ($7m) as well as Blueberry Therapeutics.
Pearce continued: “The digital maturity of the NHS and the region’s world-class universities are continuing to strengthen the North’s healthcare sector. We should be encouraged by the investment we’ve seen from the VC community in this space in Q3 and confident it will remain a pillar of the region’s tech community as we move towards 2019.”
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