High-growth UK businesses are benefiting from a big spike in European venture capital investments, according to new figures released this week.
Research from Dow Jones VentureSource suggests that investments in UK firms by European VCs jumped by 55 per cent during the first quarter of the year. IT companies, both software- and hardware-related, benefited the most from this new capital surge.
The figures also represent a vote of confidence in British companies when compared with their European counterparts. VC investment across Europe as a whole fell by 10 per cent when compared with the same period in 2009, and British firms now account for 42 per cent of the total investment received during the first three months of the year – up from 24 per cent in the same period last year.
The return of venture capital could be good news for owners of high-growth businesses that need cash to expand – particularly those looking to explore European and global markets. Many firms in this position have reported an inability to secure the credit they need from banks.
But Simon Clark, chairman of the British Venture Capital Association’s venture committee, told the Telegraph that VC funding is still only available for some of the brightest firms. “There’s an ever growing demand for the hot deals, the companies that are growing extremely fast and have the great management teams and business models. The good or mediocre companies are having a hell of a time still.”