Research: Green Shoots For UK Tech Investment

We might not be back to pre-recession levels, but statistics from US-based investment tracker Calibre One show UK VC, private equity and stock market spend in to technology firms rose 98 percent from the previous quarter to $222 million (£134 million).

But whilst the number of deals rose, too – from 32 to 40 – it was some larger firms that took the lion’s share – ad server OpenX got $10 million, Glasses Direct $15 million, Seatwave $17.3 million and Phorm raised $24 million through share placing.

Tech investment outlay is still running about two thirds of the pre-recession level seen in Q208. Report (pdf).

As for Europe as a whole, the picture is less rosy: Calibre One found that $725 million (£438.9 million) was spent across the continent on 150 deals — that’s flat compared to Q408 but it’s a far cry from Q308, when $1.03 billion was paid out in 227 deals. The figures add weight to the assertion from Dow Jones Venture Source that Q2 was the “worst quarter on record” for Euro VC investment across the board. DJ said that companies attracted 47 percent less in funding year on year.

Our own summary of VC spend during H109 found that £109.7 million was paid out during Q2 to digital businesses in the UK and Europe. But our research also shows that — in the digital space at least — the investment trend has been for more companies to receive funding than in 2009, albeit at lower rates. There is still space for the odd big-money deal — Glasses Direct‘s £10 million and Wonga.com’s £13.7 million being two of the biggest.

So there is still some money around, but these are difficult times: Atlas Venture partner Fred Destin wrote this week that “most companies are facing a period of extended drought” where VC firms look for the “must-do” deals like Wonga, Spotify and Just-Eat but where less illustrious start-ups are told: “Thanks, but no thanks…”

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