After a stunning start to the year for UK VC investment (see Best half-year in a decade for UK tech VC investment), latest data from corporate finance firm Ascendant revealed a substantial slump in Q3. CEO Stuart McKnight alluded to underlying changes in the UK investor base which sees active VCs, funded by LLPs, being encouraged to focus on a few larger deals in contrast to many of the new entrants favouring the financing of smaller, less capital intensive, opportunities.
Although total VC investment in Q3, at £183m, was down 11% yoy and almost 40% lower than the prior quarter, Ascendant is maintaining its FY outlook at somewhere between £900-£1bn. Even the low end of the estimate would represent a 14% uplift on the £789m of VC investment raised in 2011.
Eligible TechMarketView subscription service clients will be able to read our analysis of the UK VC SITS (software & IT services) scene in the next edition of IndustryViews Venture Capital.