Research from Ascendant shows that 232 companies in the technology sector were backed with £;1.01 billion from 248 investors during 2012.
The venture capital outlay is a significant rise from figures recorded in 2011 when 193 businesses were supported with £788 million from 228 backers.
Statistics from 2012 represent the largest recorded since 2008 when a similar amount was injected. Before that, bigger amounts are not found until 2001 numbers are examined.
The biggest investment of the year saw Tamar Energy backed by a large syndicate of investors including the Duchy of Cornwall. The £97 million awarded to the business is being used to develop its anaerobic digestion plants.
Other large deals saw Housetrip garner £37 million and takeaway aggregator Just-Eat pocket £40 million.
Stuart McKnight, managing director of Ascendant, says that the money invested in Tamar Energy represents 9.6 per cent of all funds invested in 2012 and was responsible for the year breaking the £1 billion barrier, a feat that has only happened twice since 2001.
Ten biggest deals of 2012:
- Tamar Energy – £97 million
- Just-Eat – £40 million
- Mimecast – £38 million
- Housetrip – £37 million
- Enecsys – £25 million
- Bluewater Bio – £23 million
- Intelligent Energy – £22 million
- SkyDox – £20 million
- Hailo – £19 million
- Prosonix – £11 million
However, McKnight has his worries and adds, ‘Whilst this is a statistical outliner, our data shows that is the “tip of the two tier iceberg” that is UK/Irish growth capital market.
‘The average deals size at the top [20 per cent] of the market is approximately £15 million. However the average deal size for the rest of the market is just £1.7 million. This low average investment and relatively low number of “super exits” [company sales at over £100 million] in the UK and Ireland [just 15 in 2012] does not seem unconnected to us.’
| Investment period | Amount invested (£million) | Number of companies |
|---|---|---|
| 2008 Q1 | 357 | 72 |
| 2008 Q2 | 201 | 57 |
| 2008 Q3 | 227 | 68 |
| 2008 Q4 | 138 | 54 |
| 2009 Q1 | 114 | 44 |
| 2009 Q2 | 129 | 43 |
| 2009 Q3 | 226 | 53 |
| 2009 Q4 | 152 | 54 |
| 2010 Q1 | 153 | 65 |
| 2010 Q2 | 190 | 47 |
| 2010 Q3 | 137 | 50 |
| 2010 Q4 | 143 | 53 |
| 2011 Q1 | 221 | 42 |
| 2011 Q2 | 234 | 48 |
| 2011 Q3 | 205 | 55 |
| 2011 Q4 | 129 | 48 |
| 2012 Q1 | 298 | 64 |
| 2012 Q2 | 322 | 60 |
| 2012 Q3 | 183 | 48 |
| 2012 Q4 | 209 | 60 |
The fourth quarter of 2012 has been identified by Ascendant as a particularly strong period of venture capital activity. In what is normally a quiet period, the firm says, total commitments reached £209 million across 60 companies compared to £129 million in 48 deals in the last three months of 2011.
Furthermore, the survey finds that Scottish Enterprise, Index Ventures, Accel Partners, IP Group, MMC Ventures, Enterprise Ireland and Parkwalk were the most active investors. However, some 66 per cent of deals involved more than one backer.
Three biggest investment sectors of 2012:
In another trend, Ascendant finds that London’s share of the VC money was ‘unusually high’, amounting to 59 per cent of the funds invested in the UK and Ireland.
McKnight comments, ‘The booming market in London is reaching extraordinary levels. In Q4, 29 London-based tech companies captured £151 million representing 48 per cent of volume and 72 per cent of the value of the market in the quarter.
‘Ascendant has tracked the UK/Irish market since 1997 and whilst London has always dominated it has never been this high.’
In 2012, 93 London tech companies received growth capital. This compares to 17 in Dublin, 14 in Cambridge, 12 in Edinburgh and 10 in Oxford.
Looking at the prospects for 2013, McKnight and Ascendant predict that 250 companies will receive around £1 billion.
