10 Most Active Venture Capital Firms in London 2023
Sarah Cheesman, Updated: 11 January 2024
London has been leading the way in European venture capital (VC) funding and entrepreneurship for many years now, even giving Silicon Valley a run for its money. Venture capital firms have pumped over £26b into the city’s startup ecosystem since 2011, from high-risk, pre-seed companies to more established ventures. Here, we’ve ranked the 10 most active venture capital funds in the capital, between 2011 and 2023, by number of investments made into London-based companies. Scroll down for full profiles on each fund, including investment criteria and some of the fast-growing businesses they’ve backed.
What are venture capital funds?
Venture capitalists are the most common equity investors in high-growth companies, ahead of both crowdfunding platforms and angel investors. VCs specialise in buying shares in and growing the valuations of private companies. But how does venture capital investment differ from other forms of startup funding? Unlike other institutional investors, many venture capitalists have been on the other side of the table, as founders of their own startups, so can offer their expertise and longer-term support, alongside growth finance.
Venture capital funds also typically invest in riskier portfolios than private equity and hedge funds, although each fund will have its own set of criteria outlining the types of investment opportunities considered. These decisions are made by fund managers (General Partners or GPs), whilst financial backing usually comes from large corporate investors or high-net-worth individuals (Limited Partners or LPs).
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Venture capital in London’s startup ecosystem
Private equity and venture capital firms are very active investors in London startups and scaleups. Since 2011, 27% of equity deals secured by high-growth UK companies and backed by PE or VC firms have gone to businesses based in London. But that proportion is increasing, standing at 42% in 2022. Our data indicates that 619 funds have backed 3,366 equity investments in the region, providing growth capital to 3,016 high-growth businesses in London.
Unsurprisingly, venture capital investment in London predominantly goes to early-stage startups. Of the PE/VC funding rounds secured by high-growth companies in the capital, 70% have gone to either seed or venture-stage businesses. In comparison, only 21% of PE/VC investment has been raised by companies at the growth stage, and just 6% by those at the established stage.
Aside from a slight drop in 2018, VC activity in London has grown significantly over the past decade, from just 39 deals in 2012 to 634 in 2022. And despite—or potentially because of—the COVID-19 pandemic, we saw particularly strong growth in venture capital investment between 2020 and 2021, with a 42% rise in deal numbers.
This article looks at the most active venture capital funds in London, regardless of sector. If you want to narrow down these VCs even further, or by activity in other regions, then you can do so on the Beauhurst platform. Whether you work in corporate finance and are looking to secure venture funding for your clients, or you’re an angel or fund seeking venture capitalists to co-invest with, Beauhurst data can indicate the best VC firms for you to approach and partner with.
Most active venture capital firms in London 2011–2023
Molten Ventures (formerly Draper Esprit) is a tech-centred VC, predominantly investing in European companies with global ambitions. Whilst any tech-centred business can apply for investment, the fund tends to focus on consumer and enterprise technologies, hardware and electronics, and digital health and wellness.
Founded in 2006, Molten Ventures participates in around 20 deals a year. It provides growth capital, in the region of £2m to £50m (depending on growth stage). Since 2011, the fund has backed at least 35 high-growth London businesses, seven of which have gone on to exit. Its London-based portfolio companies include PrimaryBid, Cazoo, and CausaLens.
Amadeus Capital Partners
Based in Westminster, Amadeus Capital Partners is an equity fund manager that focuses on micro, small, and medium-sized businesses. It tends to invest in companies in AI and machine learning, consumer services, cyber security, digital health and medical technology, digital media, enterprise software, fintech, insurtech and regtech, semiconductors and displays, and telecoms infrastructure.
While it does not publish its investment range, it invests in companies across the world. Amadeus Capital Partners has participated in 170 fundraisings totalling £2.09b with an average fundraisings of £12.6m. The stake taken by investors in these deals averaged 31% at a £41m pre-money valuation.
Passion Capital is an early-stage VC which looks to invest in digital media, software, and e-commerce companies. The fund originally targeted an average investment size of between £150k and £200k, but it has since made a wider range of deals.
First established in 2011, Passion Capital has invested in at least 56 of London’s high-growth companies. The fund’s portfolio includes Monzo, GoCardless, proptech Nested, mental wellbeing startup Spill, and insurtech unicorn Marshmallow.
Managed by Phoenix Court Group, LocalGlobe is a private equity and venture capital fund based in Camden. The most common sector it invests in is SaaS, with a particular focus on artificial intelligence.
LocalGlobe has participated in 201 fundraisings totalling £2.04b with an average fundraising of £10.3m. The stake taken by investors in these deals averaged 27% at a £34.2m pre-money valuation. Some of its previous investments include jobseekers site Adzuna, and software company Axiom.
Ascension operates a collection of early-stage VC funds, built by exited entrepreneurs to back the next generation of technology and impact founders. With visibility of over 3k investment opportunities a year, Ascension invests through a number of funds. This includes tax-efficient funds like Ascension EIS, Ascension SEIS, and the Ascension Life Fund, as well as its institutional funds Fair By Design (an impact investing fund that backs businesses reducing the poverty premium) and Good Food Fund (backing innovative foodtech companies that tackle childhood obesity).
Whilst Ascension doesn’t publish its investment range, Beauhurst research indicates that it typically invests between £500k and £5m. Since 2011, we’ve tracked 222 of Ascension’s investments in 123 London startups. As well as providing growth capital, the fund also offers mentoring services and access to its network of industry contacts.
Balderton Capital is focused on backing European-founded tech companies with global ambitions. Since launching over two decades ago, Balderton Capital has worked with more than 200 founders and raised over $3b to invest in their startups. The fund takes a long-term approach, typically investing in the early stages of a company’s growth, between $1m and $20m, and continuing to support them from start to exit.
Launched in 2007, Seedcamp invests in founders using technology to tackle large, global markets. The fund is focused on early-stage companies, and typically invests between £350k and £1m. Whilst it’s sector agnostic, Seedcamp most commonly backs software-as-a-service (SaaS) companies. The fund supports its portfolio companies to find product-market fit, builds out their sales and marketing functions, and makes introductions to a global network of experts.
The fund has an excellent track record, having backed several of the UK’s unicorn companies, including Revolut, Wise (formerly TransferWise), and virtual events platform Hopin. Its portfolio also includes top fintech startups Primer, Curve, and challenger bank Monese. Since 2011, Seedcamp has invested in 136 ambitious businesses in London.
Founded in 2000 by Simon Rogerson, Christopher Hulatt, and Guy Myles, Octopus Group is a fund management company that has expanded into all kinds of areas, including energy, real estate, and wealth management. Its investments into private companies are carried out through its European venture capital arm, Octopus Ventures.
Since the fund launched in 2008, it’s primarily invested in businesses operating in the healthcare, fintech, deeptech, and consumer sectors. It looks to back companies led by talented entrepreneurs who are seeking to make a significant, positive impact on the world. Investments typically start at £1m for seed rounds, and £10m for venture rounds, and the fund seeks to continue supporting its portfolio companies through to IPO. The fund also provides companies with a network of coaches and operating consultants, alongside its Venture Partners.
Since 2011, Octopus Group has backed 129 London-based companies. Big names in its portfolio include Secret Escapes, online marketplaces Depop and Cazoo, vegan meal subscription company allplants, and food waste reduction app OLIO.
BGF Growth Capital
BGF invests in SMEs across all sectors and regions of the UK and Ireland. Its average initial investment is around £5m, with significant follow-on funding as required, in exchange for between 10% and 40% equity share of the company. BGF (formerly Business Growth Fund) has a strong success rate, with more than 100 exits by its portfolio companies.
BGF has backed at least 71 ambitious companies based in London. Alongside growth finance, the fund offers access to a global network of experts and other investors, as well as support with strengthening boards, succession planning, and exit strategies.
Index Ventures has worked with numerous London unicorns, including Deliveroo, FarFetch, Funding Circle, Wise and Revolut. And an impressive number of its investee companies have also carried out successful IPOs. The fund works with founders in any sector, at any stage, but its portfolio shows a particular interest in seed and venture-stage startups in fintech, software-as-a-service (SaaS), and eHealth or healthtech.
Since 2011, the fund has backed at least 84 companies in London. Index Ventures markets itself as a people-focused, global fund that partners with entrepreneurs to turn ideas into international businesses. It currently has offices in London, Geneva, and San Francisco.
The future of venture capital funding in London
The future of venture capital funding in London appears promising, marked by a dynamic landscape shaped by technological advancements and evolving market trends. As the city continues to foster a vibrant ecosystem for innovation and entrepreneurship, venture capital firms are expected to play a pivotal role in supporting the growth of emerging startups across diverse sectors.
The rise of fintech, biotech, and sustainable technologies is likely to attract substantial investment, with London’s status as a global financial hub further enhancing its appeal to investors. Additionally, collaborative efforts between government initiatives, corporate partnerships, and the venture capital community are anticipated to contribute to the resilience and adaptability of the London venture capital scene, ensuring its position at the forefront of the global innovation landscape.
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