Venture capital funding raised by UK startups fell sharply in third quarter 2024, new research has revealed, adding further pressure on the founderis in searc of new investments.
UK startups secured around $2.9 billion in venture capital funding in the third quarter, a 50% drop from the previous quarter, according to the latest report from HSBC Innovation Banking and Dealroom.
According to the data, the third quarter of 2024 saw the smallest startup investment in the UK in the last five years.
But the financing trend East widely consistent with the levels observed in 2023.
Fintech at the top
Fintech is Britain’s best-funded tech sector so far this year, at $3.3 billion, up from $4.5 billion in 2023.
The UK fintech sector is back,” said Remus Brett, general partner at LocalGlobe.
“Many scaleups, emerging stronger than ever from a difficult financing market, are considerably reducing the market share of incumbent operators. »
Top fintech fundraisings so far this year include Monzo £340 million investment in March, which was later expanded to $610 million.
A small handful of megarounds in the health technology sector, including Flo Health’s £156m Series C and Myricx Bio’s £90 million Series A catapulted it into second place, with $2.3 billion raised so far.
Simon Bumfrey, head of technology and life sciences at HSBC Innovation Banking UK, said the group expects this trend to continue as domestic and international investors both show strong interest in the sector. .
Bumfrey said investors see significant “opportunity” in the “UK innovation ecosystem”, sparking an “optimistic outlook for 2025 and beyond”.
The report also reveals that the share of venture capital funding raised by UK startups from overseas in 2024 is, so far, one of the highest seen in the last decade.
Around 70% of venture capital investment in the UK came from overseas, the third highest in the last 10 years after 2019 and 2021.
The UK remains the best-funded startup ecosystem in Europe, with $12.4 billion so far, ahead of Germany and France, which have raised $6.7 billion and $6 billion respectively. 5 billion dollars in 2024.