South west sees steep increase in VC investment in fourth quarter

South West businesses received more than £104 million (m) of venture capital investment in the last quarter of 2024 - up a whopping 82% compared to the third quarter, according to a KPMG report.
It means the region was ranked fourth in terms of VC investment across the UK regions in the final three months.
London saw £2.9 billion of VC investment, the South East saw £637.8 million, while the East of England saw £480.5 million, the latest Venture Pulse report showed.
"It’s great to see such a steep increase in VC investment in the South West during Q4, positioning it as the fourth largest UK region for the quarter, which is testament to the region’s thriving private business ecosystem," said David Williams, office senior partner for the South West at KPMG UK.
"Looking ahead to 2025, we’re excited to see the continued growth of the South West’s most promising firms, which span a huge range of sectors, especially those that make the most of VC funding to pursue expansion," he added.
Meanwhile, across the whole of the UK, a total of £15.5 billion was invested during 2024 - the highest amount in Europe.
Funding in the fourth quarter jumped by more than a third from £3.1 billion to £4.4 billion.
This was driven largely by $1.3 billion raised by Greenscale, a London-based AI data centre firm.
Nicole Lowe, UK head of KPMG's emerging giants practice, noted: "After a difficult Q3, it’s great to see the UK end the year as the top destination in Europe for VC investment.
"The strong rebound in Q4 has boosted optimism among investors looking ahead to the rest of 2025, with AI likely to remain at the forefront of those looking to invest.
"However, the impact of both global and domestic events such as the UK Budget measures and the new US president taking office could still contribute to a level of investor caution."
In the south west, there were 28 transactions completed in Q4, up from 21 in the previous quarter, with the highest proportion of deals taking place in Bristol, where seven VC investments took place.
In addition, £47.4 million - more than half of the total figure raised in the region in the quarter - was generated by investment into Bristol-based B2B products and services firm Huboo Technologies.
It was a strong quarter for the region's B2B and B2C product and service providers, with £73.9 million invested into 13 companies, spanning logistics, aerospace, environmental services and automotive.
Information technology (IT) was also a robust sector for VC investment, with more than £14.7 million invested across 11 regional companies.
KPMG is a global organisation of independent professional services firms providing audit, legal, tax and advisory services.