This year is set to be greatest ever year for funding UK start-ups and scale-ups, according to research house Beauhurst.

The first half of 2019 was the best on record, says Beauhurst, with a 20pc increase in the total amount invested.

The majority of the increase was at seed-stage, which saw a 7pc increase in funding UK start-ups – the first since the beginning of 2017.

There was also a 14pc increase in the number of growth stage deals, with the average size rising from £16m to £21m.

The UK artificial intelligence sector experienced a record first half of the year and a 15pc increase in deals since the second half of 2018.

Meanwhile, UK adtech recorded a 14pc increase in deal numbers, its first rise in three years.

Fintech record high

The UK’s fintech sector alone hit a new high of £2.3bn raised in funding in the first half of 2019. That’s equivalent to 85pc of the total amount raised by fintech in 2018.

According to Innovate Finance, investment in UK fintech rose by 45pc in the first half.

However, the volume of deals fell by 30pc, indicating a move towards larger and later-stage rounds as the sector reaches maturity.

Illustrating the divide between the white-hot fintech bubble in trendy East London and the rest of the country, London fintech start-ups accounted for 90pc of all £2.3bn in investment.

Fintech is the highest-performing part of the UK tech industry, which generates £130bn to the UK economy.

Megadeals here to stay

The dominance of fintech is highlighted in the latest global venture capital report published by CB Insights and PwC.

Fintech start-ups worldwide commanded the most funding of any sector in the second half of 2019, raising $5.1bn (£4.1bn) worldwide.

The number of funding rounds across all sectors totalling $100m or more hit a record quarter in Q2 2019, underlining Beauhurst’s conviction that “megadeals are now a permanent feature of the funding landscape”.

Megadeals accounted for more than half of the $28.7bn total raised worldwide during the second quarter, according to the report.

In June 2018 European and US venture capitalists were sitting on a record $128.5bn waiting to be invested.

Further reading

IQ Capital ‘open to suggestions’ as to how to spend the $300m it has raised for deep-tech investment