Article originally appeared in RealBusiness on 10th March 2016
More companies in the technology space were backed by venture capital and institutional sources than during the market peak back in 2000, new findings from Ascendant Corporate Finance have found.
A total of six investments worth in excess of £50m were closed during 2015, with fantasy sports platform FanDuel leading the way with a deal totalling £175m.
Ascendant Corporate Finance, as part of its quarterly and end of year round ups of technology deals worth £500,000 or more, noted that £2.59bn was invested in 534 deals by 421 investors. This compared with figures of £1.48bn from 350 deals and 311 investors in 2014.
The firm also concluded that 70 per cent of deals were worth less than £2m in value, accounting for 11 per cent of all money invested. Internet services led the way with £1.62bn, followed by software with £430m and cleantech with £272m.
Although the market did not exceed the total amount of money invested in 2000, when £3.5bn was recorded, it did fund more companies than at the peak of the dot.com bubble.
The £175m raised by Edinburgh-based FanDuel, which takes its total backing to more than £250m inside five years, is the biggest deal Ascendant has recorded since it began tracking the market in 1997.
Looking further into industry trends, Ascendant noted that there had been a “massive rise” in angel participation in technology fundraising deals. While in 2014 their contributions totalled 32 per cent, this rose to 46 per cent in 2015 and compares to 19 per cent in 2007.
Crowdfunding, the firm said, has been the “single biggest driver” – with 11 per cent of deals closed in 2015 backed by a crowd of investors.
The most active regions for technology investment were London and Scotland – responsible for 59 per cent and 11 per cent of deals respectively. The English capital’s share of venture capital commitments was 61 per cent of the funds invested in the UK and Ireland.
The 10 biggest deals of 2015 (with disclosed values):
Sector: Fantasy sports
Amount raised: £175m
In short: The Scottish fantasy sports venture secured the much-coveted $1bn valuation when it turned to multiple backers for its Series E round. New funds will be used to boost customer acquisition.
(2) Funding Circle
Sector: P2P finance
Amount raised: £102m
In short: As one of the earliest players on the block in the peer-to-peer finance space, Funding Circle has proved attractive to both venture capital backers and the government’s British Business Bank, which has directed funds to be appropriated by the platform.
(3) Atom Bank
Amount raised: £84m
In short: As a digital only bank, Atom is making a play for younger customers and is incorporating gamification, 3-D visualisations and other features to get customers to use its services more.
Sector: Food and drink
Amount raised: £66m
In short: Another young technology business gobbling up venture capital, Deliveroo closed its second of two 2015 funding rounds in November (a first in July brought in an additional £45m). Operating a delivery service for restaurants that don’t do delivery, it has already expanded beyond Europe to the likes of Asia and Australia.
Amount raised: £65m
In short: At the beginning of 2015, Real Business found out how WorldRemit planned to spend the millions of venture capital investment it had raised. Expanding US office and targeting more emerging markets were on the agenda.
In short: International expansion with new local language sites, opening new offices in global markets, fuel omni-channel growth and customer propositions including launching same-day delivery
In short: The new capital for the client lifecycle management software business will be used to grow its worldwide presence and footprint in new and existing international markets.
(8) Wahanda (now Treatwell)
In short: Treatwell had a particularly busy 2015. Not only did it close close two sizeable investment deals, but it also went through a complex rebranding exercise – leaving behind its old Wahanda name.
Sector: Food and drink
In short: As we mentioned above, the restaurant delivery service closed two big deals during 2015 and has set its sights on global markets.
(10) Secret Escapes
Amount raised: £38m
In short: It had been a while since luxury travel offering Secret Escapes had raised any growth funds, but July saw it bank a sizeable amount with the intention of closing more acquisitions. As only the fourth business in Europe to get money from Google Ventures, Secret Escapes is shaping up for a big 2016.