Downs and Ups of Tech Investment in 2020 – Key Figures and Trends

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Downs and Ups of Tech Investment in 2020 – Key Figures and Trends

Ascendant has just completed its review of venture investment in private technology companies in the UK and Ireland during 2020 and I thought you might be interested in a few of the facts and figures.  The headlines are: £9.45bn was invested in 1,016 deals of over £0.5m by 1,029 institutional/professional investors.  Much against expectations and general devastating effects of the Covid19 virus, the value of investment increased by 15% over the 2019.  However, the number of deals completed did reduce by 5% – much less than many had predicted. Q4 saw the largest amount ever invested in UK/Irish tech – £3.25bn – so there was a substantial boince back after the low point of Q3. Below we have set out some of the key trends in this Covid year….


  • In 2020, £9.45bn was invested in 1,016 deals (of over £0.5m);
  • In Q4, 265 companies received £3.25bn – the largest amount ever invested in any quarter in the UK and Ireland
  • In October, November and December – 85, 95 and 85 deals were completed respectively (see chart below);
  • The busiest investors were Crowdcube, Seedrs, Parkwalk, Mercia, Scottish Enterprise, Enterprise Ireland, Seedcamp and BGF;
  • There were 23 Megadeals (i.e. >$100m);
  • 48% of deals were less than £2m in value, these received 5% of money invested;
  • Private investors participated in 31% of deals and Crowdfunding platforms financed 10% of deals;
  • US investors participated in 18% of deals, European investors in 18% and Corporate Investors in 18%;
  • In the 3 primary areas of investment focus – Internet Services (£4.7bn, 458 companies), Software (£2.2bn, 311 companies), and Hardware (£2.6bn, 247 companies);
  • The 10 biggest deals were: Revolut (£384m), G.Network (£300m), Molo (£266m), Karma Kitchen (£252m), Cazoo (£240m), euNetworks (£226m), Octopus Energy (£184m), Graphcore (£165m), Snyk (£154m) and Zenobe Energy (£150m);
  • Fintech and Medtech/Digital Health remain the market’s darlings;
  • Geographically, all regions had high levels of activity, but companies based inside the M25 took 76% of the funds invested in the UK and Ireland; and
  • For first time in more than 20 years, during 2020 fewer London companies (-2%) were backed in than in 2019, but those same companies received 20% more investment (£s).

2020 – a closer look…

The chart below shows the level of monthly investment activity tracked by Ascendant in 2020 vs 2018/19:

The data shows that whilst there was a definite trend downwards in Q2 and Q3 since the Covid pandemic took hold, there was a modest recovery in Q4.  If fact after adjusting for seasonal fluctuations (i.e. summer slowdown), the scale of reduction was modest and far less than feared.  As we have previously discussed in our market reports, there is some anecdotal evidence of an increased number of non-disclosed internal rounds (some with Future Fund support), but it is impossible to identify these or even guess at their extent at this time.  So, our data is likely to have underestimated the volume of transactions by a few deals and the value of investment by a very small percentage, but we are confident that these are unlikely to materially change the broad picture. 

The venture market’s bounce back is more evident when the value of investment is considered.  Below we have looked at the quarterly trends (to avoid any usual spikes from singular deals):

For the avoidance of doubt Q4 saw investors commit more than ever to technology businesses in the UK and Ireland.  This was driven by 9 Megadeals (>$100m) namely: G.Network (£300m), Molo (£266m), Cazoo (£240m), Octopus Energy (£184m), Graphcore (£165m), Zenobe Energy (£150m), Hopin (£95m), Arrival (£91m) and Oxford Nanopore Technologies (£84m).  These and a slew of other transactions raised the average deal size in 2020 to £9.3m up 21% from the 2019 average.  It would be easy to suggest that investor have moved to larger later stage deals but that is only partially true as the average age (since foundation) at completion moved from 5.29 years to 5.5 years.  Ascendant believes that the bigger driver was continuing expansion of investors participating in the market.  The growth of active investors backing technology businesses in the UK and Ireland has been a key characteristic of the market over the last 6 years (see below).

It would be easy to trot out the usual analysts’ commentary about it being obvious that more investors chasing deals in the same space will inevitably lead to price inflation and over commitment in that sector.  However, this does not do justice to a class of hyper growth, disruptive technology businesses addressing super-sized global markets which have been emerging in the UK (and Europe) over the last decade – not just unicorns but something much bigger.  Many investors are chasing these opportunities and the arrival of many US, European and Asian VCs in London reflects this.  The resilience of the market during 2020 has demonstrated that many investors strongly believe that there are greater returns to be made from these rare but increasingly common companies than in many other areas where they invest.

Regional Ups and Downs

For the first time, since Ascendant started tracking VC deals more 20 years ago, the annual number of London based companies receiving investment dropped.  This was not a dramatic decrease – just 2% – but it is significant.  Firstly because it has never happened before but also because investment activity in some other regions increased.  The winners were: Scotland (+14%) and Thames Valley (+14%).  All other regions experienced a decline in deals completed, with the worst being Ireland (-31%) and the North (-25%).  Nevertheless, the amount of money invested inside the M25 did materially increase (+20%) to over £7bn.  So the evidence is clear that investors in the Capital favoured bigger later stage deals – the average deal size in London during 2020 was £11.9m whereas everywhere else it was just £5.5m.  Maybe “London streets are paved with gold” after all…

The relative performance of the regions has a number of possible causes including localised strengths in certain sectors and technologies, scale/capacity of certain investor communities and differing investment strategies deployed by those regional investors.  We expect this variation to be temporary and the usual pattern of balanced growth throughout the country to reassert itself if and when the “old normal” comes back after we are all vaccinated.

Outlook for 2021…

2020 was an extraordinary year throughout the world – let alone in the UK and Ireland.  As countries, governments and their people struggled to cope with Covid there have been a surprising number of good stories during the lockdown gloom.  Few of us who participate in the market would have expected the venture investment to deliver upbeat news in these conditions – but it did – with more investors writing a bigger cheques.  Investors have now had a year to adjust their processes and figure out how to identify new opportunities and secure the deals that they want.  2021 has started strongly with over a 100 companies receiving £1.6bn including 5 Megadeals in January alone.  So with the real prospect of recovery in the broader economy if and when people are vaccinated, the outlook for 2021 looks promising.  Therefore, we estimate the total amount likely to be invested in 2021 will exceed £11bn in over 1,200 companies.  A bullish view perhaps – but we are feeling optimistic!

If you have any queries on this do not hesitate to contact Stuart McKnight via

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