Mapping the UK's VC and PE Funds

Mapping the UK's VC and PE Funds

Farzana Haque, 13 april 2023

After the highs of 2021, private equity (PE) and venture capital (VC) funding appears to be slowing. Looking back over 2022, we found that both the volume of deals and the amount invested had decreased. 

However, despite this, there are currently 547 active VC and PE funds in the UK—that have participated in a total of 15,923 fundraisings— that continue to invest in the most ambitious and innovative startups and scaleups. Just last year, VC and PE funds were involved in 1,530 deals worth a combined £28.3b. 

Yet there’s a certain mystique around the world of VC and PEs. So in this article, we’ve laid it all out. We’ve dug into our private company data to map out where VC and PE funds are located and where they are investing. 

Read on to uncover the data. 

Where are they located? 

It’ll come as no shock that London dominates the UK scene. Of the 381 funds with known headquarters, 302 (79%) were located in London. All the regions of the UK were, however, represented with at least one fund based in each region.

Outside London, the North West is the most popular spot for funds, with 19 VC/ PEs based there. It’s home to some high-profile investors such as SFC Capital, which was the most prolific cleantech backer last year. Other firms based in the North West include Palatine Private Equity, Seneca Partners, Deepbridge Venture Capital, Redstone Venture Managers and Flight Fund. 

The South East and Scotland also stood out as the only other regions with a double-digit number of funds located there. Scotland is home to funds such as Circularity Capital, Impact 12 and Par Equity – the most abundant high-growth cleantech investor. Some of the notable funds based in the South East include Oxford Capital, Altitude Partners, Blue Star Capital and Climate VC.

What regions are they investing in?

Yet again, unsurprisingly, most VC/PE deals were made with London-based companies. Looking at 2022 fundraisings, we found that 54% of deals went to those in London. 

Areas surrounding London, namely the South East and East of England, saw the second and third highest levels of VC/PE activity. Indeed, a further 16% of deals went into these regions. 

Moving away from the capital, other regions that saw high levels of investment were Scotland and the North West. Both these areas received 6% of the overall 2022 funding. 

In turn, despite the vast majority of funds being headquartered in London, we are seeing funding spread across the country. However, there is still a way to go in terms of seeing more of an even spread, when we consider that Welsh companies only received 2% of the overall 2022 funding pie, and Northern Ireland received just 1%. 

What sectors are they investing in? 

Looking at the top 2022 VC/PE-backed sectors, the technology sector proved to be the most popular, gaining the bulk of the investment. Companies in the tech industry received a total of 43% of the funding, with SaaS being the most popular sector in 2022. SaaS companies also acquired a whopping 13% of all 2022 VC/PE funding. 

The business and professional services sector also performed well, receiving the second-highest proportion of the investment pot at 35%. Meanwhile, despite e-commerce being one of the top 10 most funded verticals, the retail sector only obtained 3% of all 2022 VC/PE funding. 

What does 2023 hold? 

So far we have seen 227 VC/PE-backed fundraisings this year. Following pursuit from 2022, 78% of the deals went into technology companies with 33% going to Saas businesses. Perhaps this trend will continue throughout the year? Or perhaps a different sector altogether will finish on top? Either way, we’ll be back with updated statistics! 

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