Value of total equity investment in unlisted small companies rose 24% to £8.5bn in 2019
British Patient Capital supported funds almost double their deal count in 2019
Follow on funding outstrips first time equity deals
Today, British Patient Capital comments on the British Business Bank’s Small Business Equity Tracker which reveals UK VCs currently have a record amount of dry powder ready to deploy.
Catherine Lewis La Torre comments: “According to the British Business Bank’s Small Business Equity Tracker, venture capital dry powder – capital yet to be invested – is collectively worth £8.4bn. equating to 12 to 15 months of investment based on 2018 and 2019 investment level. While clearly this isn’t all down to British Patient Capital, at 31 December 2019, British Patient Capital has already committed more than £1bn to venture capital and venture growth managers, and just as importantly were joined by other institutional investors committing a further £4bn alongside us.
That’s £5bn of capital, with £3bn still to be invested in high-growth innovative companies.
“Ultimately this gives venture capital funds the firepower they need to continue to support UK innovative companies now and power the innovation economy as we emerge from the crisis.
“Further good news is that the Small Business Equity Tracker reveals that UK scaleups are better capitalised now, with British Patient Capital supported funds almost doubling their deal count in 2019. Addressing the funding gap that has affected later-stage businesses, by enabling larger funding rounds, is central to our long-term vision for more home-grown fully funded, high growth companies to fulfil their potential to be players on the global stage.”
Commenting on the increasing attractiveness of private markets to institutional investors,
Catherine Lewis La Torre, added:
“In addition to the record amounts of venture dry powder, I’m pleased to see that for the first time that follow on funding – investment in companies that had already received equity finance – outstripped first-time deals, which shows our innovative companies are able to raise multiple
funding rounds. This, together with the significant amounts of institutional capital invested alongside British Patient Capital demonstrates the increasing importance of the private markets for institutional investors.
Given negative bond-yields, asset owners are continuing to seek out higher returns from private markets. The Equity Tracker published today demonstrates a maturing of the market, as investors seek returns from unlisted companies in the UK technology sector, which accounted for 47% of investment by value in 2019.”
