Venture Pulse Report Q2 2024

VC investment into UK startups sees the first signs of recovery

Outlook for the UK

Pockets of optimism emerge as VC investment in the UK more than doubles quarter on quarter. After a dismal opening to the year, which saw just $3 billion in VC funding raised by UK businesses — the lowest amount seen in twenty-two quarters, activity picked up dramatically in Q2 24 with $6.9 billion raised. This was also up year on year on the $4.7 billion raised in Q2 23 as investor sentiment starts to become more positive.

So far more than $9.8billion has been raised this year by UK businesses, ahead of the $8.7 billion raised in the first half of 2023. Three-quarters of the VC funds invested into the UK in the last quarter flowed into London based businesses, with more than $5.3 billion raised, up significantly on the $1.6 billion raised in London in the opening quarter of the year. The largest deals of Q2’24 included Wayve’s $1 billion raise and two large deals in the fintech space — a $999.6 million raise by Abound and a $621 million raise by Monzo.

Nicole Lowe

Head of Emerging Giants and KPMG Access in the UK

KPMG in the UK

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Whilst deal value was up in Q2 24, the number of deals completed was down both year on year and quarter on quarter, mirroring the ongoing challenges faced by the VC market, including the high interest rate environment and geopolitical uncertainties.

The fact that the UK was able to close out so many megadeals this quarter is testament to the fact that our scaleup ecosystem has matured to a level it can attract such huge global interest. It’s also important to see that Seed and Series A rounds are improving so that we can support these new businesses and encourage entrepreneurship across the UK.

Nicole Lowe

Head of Emerging Giants

KPMG in the UK

Optimistic outlook for Europe

Across Europe, there was growing optimism that the IPO window could reopen slightly in Q3 24 should economic conditions remain stable, with a growing number of companies beginning to consider and prepare for the possibility of a future IPO. During Q2 24, the London Stock Exchange saw some positive activity, with budget computer company Raspberry Pi raising $211 million in its June IPO; the company’s stocks continued to perform well in post-IPO trading.

After falling to a fifteen-quarter low of $13.9 billion in Q1’24, VC investment in Europe rose to $17.8 billion in Q2’24. The UK accounted for nearly 40% of the total VC investment made into Europe during Q2 24 and half of the region’s top ten largest deals, including a $250 million raise by sustainable housing company HarperCrewe.