Ascendant, the technology-focussed investment group, reports that, in Q1 2011, £221m (up from £153m in Q1 2010) was invested in 42 UK/Irish companies (65) by 72 investors (82).
“It is worth noting that we have excluded 2 large deals – Plastic Logic (£437m) and Appsense (£43m) – on the grounds that the companies are no longer HQ’d in the UK,” says Stuart McKnight, managing director of Ascendant, “if they were included the amount invested in Q1 would have exceeded the whole of 2010!”
Beneath the headlines, there are two important trends in the data: negligible levels of investment activity in the Cleantech sector and significant decline in deals completed in the Regions (i.e. outside London).
Ascendant collects deal data from multiple sources (7 or 8) as well as directly from investors. Even so we have only been able to identify 2 completed deals in the Cleantech sector with a combined value of just £3m. This follows a 40% reduction in the funds invested in Cleantech during 2010 when compared to 2009. So has the bubble burst? Probably not as we have seen a few good Cleantech deals come through in Q2 – two of which Ascendant has done. But we are watching this space closely.
Comparing Q1 2011 with Q1 in 2010, there was a notable drop in activity – just 42 deals vs. 65 respectively. The decline has been most marked in the regions. Outside London, most of the regions we track recorded just 2 or 3 deals of £500k or more. When the value of funds invested is considered, London based companies took over 60% – well above the norm of 45%. The one exception to this was the North, which on the back of the Jeremie initiative faired much better the rest. Many of the regional development agencies have been “throttling” back in the last few quarters reflecting Government cutbacks and reductions in their budgets. We see no immediate solutions presenting themselves to this problem and anticipate that it will continue for some time.