Midlands scaleups secure more than £300m in investment
Businesses in the Midlands attracted £309 million of Venture Capital (VC) investment in Q2 of 2021, according to KPMG 's latest Global Venture Pulse Survey.
It was raised across 35 deals in the region, representing 5 per cent of all UK deals by volume during the quarter.
The businesses with the most significant investments in the Midlands in Q2 were Alcester-based Quanta Dialysis Technologies, who secured £245m in funding, and Birmingham-based Boomin who secured £35m in funding.
Stuart Pilgrim (pictured), head of TMT M&A at KPMG in the Midlands, commented: “The investment we 're seeing in the region is testament to the variety of high quality businesses that the Midlands is home to.
“As investors seek out innovative businesses and ambitious management teams looking to realise their growth potential, I expect we 'll see a continued uptick in activity.
“In terms of sector strengths, we 're seeing plenty of interest in tech-enabled businesses and those with a strong ESG agenda, so early stage businesses with these elements are likely to attract more investment. ”
The report found that Global Venture Capital (VC) investors continue to deploy record amounts of money into UK scaleups with nearly £17bn raised in the first half of 2021. This already surpasses the total sum raised in the whole of last year.
The research, using data supplied by PitchBook, recorded more than £6.5bn invested into fast growth UK businesses in Q2 21.
A strong COVID-19 vaccination programme and greater business confidence in the post-Brexit environment, resulted in 708 deals being completed in Q2 21, up 7 per cent on the previous quarter.
Fintech and healthtech businesses attracted the largest deals in Q2 21, including a $500m ( £360m) raise by B2B payments firm SaltPay, a $330m+ ( £240m) raise over two rounds by AI-powered drug discovery company Exscientia, a $453m ( £322m) raise by digital bank Starling Bank, and a $130m ( £94m) raise by digital health company Huma.
While later stage deals continued to attract the majority of investment, interest in earlier stage deals grew, with more businesses beginning to raise Series A and smaller rounds.
Bina Mehta, chair of KPMG UK and head of the firm 's UK Emerging Giants Centre of Excellence, said: “The UK has demonstrated resilience and adaptability in attracting overseas investment in a post-Covid, post-Brexit era, which is likely due in part to the maturity of our scaleup ecosystem.
“The power of our disruptive businesses to deliver impact on a global scale is more important than it 's ever been, and our UK innovators are a real success story. VC investors, particularly from Asia and the US, continue to be attracted by the strength of our businesses and diversity of our UK scaleup ecosystems across the UK.
“This quarter we have seen big investments made to fast growth businesses not only in London but in Cambridge, the Midlands and the South East of England.
“Whilst it is our established late stage businesses that are attracting the big investment, Angel investors and university incubators are playing an increasing role in developing strong and active programmes in the regions, which attribute to our diversity and growing number of disruptive scaleup businesses.
“It is great to see that early stage businesses are starting to attract the funding they need in order to scale.
“Supporting our early stage businesses will be crucial in order to continue to develop our ecosystem and maintain our global position as leaders in innovation. ”