Growth in annual South West venture capital investment outpaces national trend

March 6, 2023

Bristol’s strength in burgeoning sectors such as cleantech, fintech and AI (artificial intelligence) helped push up venture capital investment in the South West last year by 9%, outperforming the national picture.

Firms in these sectors, along with manufacturers, attracted some of the largest investments out of the annual total of £455m across 124 deals, according to the latest Venture Pulse Survey by accountancy giant KPMG UK. 

Across the UK as a while, total venture capital investment fell last year by 23% to £22.7bn.

The report also shows the region’s gaming and ecommerce sectors are expected to gain traction this year as early-stage businesses in the region continue to grow.

Almost half the scale-up businesses that received investment in the region last year were headquartered in Bristol, reflecting the city’s reputation as the South West’s tech hub, according to the report.

Among the standout deals was Bristol-headquartered open finance, open data and payments platform Moneyhub, which secured £40m in funding to accelerate the development of its services.

KPMG UK Transaction Services partner Kay Drury said: “Despite concerns around the uncertainty in the economy and rising inflation, the South West continues to attract a healthy amount of venture capital investment, especially in the tech enabled space.

“While interest over the near-term is expected to focus on energy, interest in cleantech will likely accelerate as companies in the region work to meet their decarbonisation targets.

“This is particularly good news for the region which has a great track record of producing innovative businesses that can help solve some of society’s biggest challenges.”

She said businesses that could clearly demonstrate a proper path to profitability, as well as the business model’s sustainability, would take centre stage in companies’ valuations.

“Unless a company can really prove the strength of their story and technology play, they are going to struggle,” she added.

“As we move into 2023, venture capital providers are increasingly looking for fast-growth businesses that are efficient, responsible with capital, and focused on revenue. When they find them, they’re willing to invest just as much as they have before, if not more.”

Comments are closed.


Reach tens of thousands of senior business people across Bristol for just £120 a month. Email for more information.