Venture capital firms invested £600 million in UK technology start-ups during the first six months of the year, up 31% from the same period of last year and the highest figure in over a decade, according to research by Ascendant.
The growth in investment was driven exclusively by the ‘Internet / Wireless Services’ – which Ascendant defines as "websites and services provided via the web" – and cleantech sectors. Investment in all other sectors, including software and semiconductors, declined year-on-year.
In the Internet / Wireless Services sector, 22 UK companies received a combined £130 million of VC investment. Notable investments included take-away website Just-Eat (£40m), collaboration SaaS provider Huddle (£15m), vetinary product distributor MedicAnimal (£10m) and gift website Notonthehighstreet (£10m).
A total of 16 software companies received £44 million in investment, with Openet Telecom (£14m), Natural Motion (£7m) and DataSift (£4.5m) making the biggest deals.
Stuart McKnight, CEO of Ascendant, noted that while VC investment is increasing on all metrics, the growth has come primarily from small, early stage investments from small funds.
“The emergence of new funds is encouraging but it is very noticeable that many of these are small in scale," he said. "This raises two questions: how long will they last and where will the next [investment] come from?
“Shallow pockets have been a defining characteristic of UK/Irish Tech Investors for many years and we may suffer these issues for a little longer,” said McKnight.