Venture capital investment levels soar in South West scale-ups says KPMG

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Nicky Godding

Venture Capital investment in South West businesses grew to £416million in 2021, according to KPMG UK’s Global Venture Pulse Survey. This figure was up from £318million in 2020, marking a 31% increase.

In the last quarter of the year alone, VC investment in South West businesses reached £196million.

Kay Drury, Transaction Services Partner at KPMG in the South West, said: “2021 was another fantastic year for VC funding across the UK, but it was particularly encouraging to see a good regional split as well with numerous scale-ups operating outside of the major cities. Despite ongoing challenges posed by the pandemic and changing regulations, scale-ups in the South West have remained resilient and are well positioned to carry that momentum into 2022.”

Among the significant investments in the South West during the last quarter of the year were Bristol-based Ultraleap, a developer of 3D technologies.

In 2021, investment in UK scaleup businesses by VC reached record levels with £26billion invested, according to the KPMG survey.

The report found that the UK attracted more VC investment in 2021 than France and Germany combined, with the amount invested in fast growth businesses in the UK more than doubling (56%) in 2021 compared to 2020.

VC investment in Fintech is likely to remain one of the hottest areas of investment, following several digital banks in Q4’21 large VC rounds, but investment in Agtech is also expected to gain significant attention in 2022 as early stage businesses across the region grow and begin to attract larger funding rounds.

Looking ahead to 2022, Warren Middleton, lead partner for KPMG’s Emerging Giant practices, added: “With FinTech and HealthTech still high on the radar for VC investors, world leading regions such as London and Cambridge will continue to attract large volumes of investment next year. Additionally, we could see some big things happening in more rural ecosystems around the UK as Agtech and sustainability rise up the investment agenda.

“Following COP26, investor interest in sustainability-driven startups remains high. ESG is an area where investment levels are picking up in the UK. VC investors are looking to back companies that will have long-term transformational and positive impacts on society and their own businesses and are supporting portfolio companies with appropriate ESG tools such as a measurement framework, training and insights, to progress on their ESG journey.”

Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe. After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts. She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.