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August funding roundup: UK tech investment tops $385m

investment-money

August was a strong month for UK tech investment, with the announcement of 17 rounds totalling $385.92m or £294.96m, according to the Tech City News UK Investment Tracker.

This is six fewer rounds than were announced in July, but the total amount raised was 133% higher in August. This was largely down to Deliveroo’s closure of its $275m Series E.

Deliveroo wasn’t the only UK tech firm to close a Series E in August, Notonthehighstreet.com also closed its Series E, raising £21m. Of the other rounds raised, six were Venture rounds, seven were Seed, one was Series A and one was Series B.

Some 15 of the rounds were raised by London-based companies, with the remaining two rounds being raised by firms from Edinburgh.

Investors

The London Co-Investment Fund (LCIF) was fairly active in the quarter, contributing to the rounds raised by Live Better With, Reposit, mOm and BeeLine. Seedcamp invested in two of last month’s rounds.

LCIF fund manager Puneet Raj Bhatia said: “Between Jun-Aug, LCIF invested £2.3m in 15 companies. This has been a significantly higher level of activity than anticipated.”

“We suspect there has been an element of founders/ companies expediting their funding rounds due to the expected uncertainty following Brexit,” he added.

Two of the startups LCIF invested in over the course of August were HealthTech companies (mOm and Live Better With). While healthcare is one of the tech verticals in which the fund is interested, Bhatia said it will “continue to invest in strong businesses across all our target sectors”.

Bhatia went on to say the fund is expecting to contribute to around five rounds in September.

Minor response to Brexit

Balderton Capital investor Anna Boffetta said that, while some people predicted a massive slowdown in deal-flow following the Brexit decision, this hasn’t come to fruition.

“The volume of companies raising investment for the first time is down compared the same period in 2015, but this is not cause for panic. The response has been minor, measured and proportionate; and the best companies will continue to raise money,” she added.

Boffetta said data Balderton collects shows follow-on rounds are consistent with last year’s figures, and the average investment-size in Europe is marginally larger, with enterprise software, e-commerce, healthcare, financial services analytics, security, and food representing over half of the funding.

“This is hugely reassuring for the technology industry in this continent, as it indicates that VCs are still investing with confidence in growth-stage companies in a variety of sectors,” she concluded.

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