High-tech venture capital in the UK and Ireland ended the year on a high note with £209m invested in 60 companies compared to £129m in 48 deals in Q4 2011, says Ascendant, the tech-focussed investment company.
Over 2012 as a whole, £1.01bn (up from £788m in 2011) was invested in 232 UK/Irish companies (193 in 2011) by 248 investors (228 in 2011).
This is the highest level of investment in tech companies in UK/Ireland since 2008 (£1.0bn) and before that way back to 2001 (£1.9bn).
The stand out transaction of the year was Tamar Energy. A large syndicate of investors, including no less than the Duchy of Cornwall, provided just short of £100m to this developer of anaerobic digestion plants.
In the modern era (i.e. post internet bubble), this is by far the largest transaction Ascendant has recorded.
The next largest we have seen were Wonga (£73m, Feb 11), Plastic Logic (£51m, Jan 07), Spinvox (£50m, Mar 08) and Xchanging (£50m, Nov 02).
No other UK/Irish tech deals have exceeded £50m in more than a decade – which highlights the extraordinary scale of the Tamar deal.
The money invested in Tamar Energy represents 9.6% of all funds invested in 2012 and it was responsible for the year breaking the £1bn barrier that has only happened twice since 2001.
Whilst this is a statistical outlier, our data shows that is the “tip of the 2 tier iceberg” that is UK/Irish Growth Capital market.
The average deal size at the top (20%) of the market is approximately £15m. However the average deal size for the rest of the market is just £1.7m.
This low average investment and relatively low number of “super exits” (company sales at over £100m) in the UK and Ireland (just 15 in 2012) does not seem unconnected to Ascendant.