The Deal
Equity investment
in the UK in 2020
2020 in review
1
Analysis: the year that ended in tiers

2
Investment activity in 2020
4
First time fundraisings
6
Impact of coronavirus
7
Investment stages
8
Geography
9
Sectors and verticals
10
Investors
11
Valuations
12
Female founders
13
The biggest deals of the year
14
Sectors in focus
16
Ventures on a virus vendetta
17
Digital security in the WFH era
20
Money on a mission: impact investing in 2020
23
Investors in focus
26
Top investors by UK deal numbers
27
Crowdfunding in 2020
28
Angels in the cloud
29
Basket case valuations
32
About Beauhurst
35
Contents
Methodology and glossary
Data for this report was finalised on the 3rd February. To be included in our
analysis, an investment must be:
•
Publicly announced between 1 January 2011 - 31 December 2020*
•
Some form of equity investment
•
Secured by a non-listed UK company
Although we collect data on unannounced rounds, we exclude these from
temporal analyses because they are subject to a time lag.
Figure 8.3 is the only exception to this rule. This graph includes unannounced
rounds in order to paint a more accurate picture, as unannounced rounds are
more likely to be flat or down rounds than those that are announced.
Future Fund investments
Figure 1.2 includes data on investments completed with the Government’s
Future Fund, managed by British Business Bank, to show the impact of the
fund on overall investment figures. But, given that we don’t have details on
the vast majority (88%) of these deals (as they have not yet been announced
to the public), we have excluded all deals that include Future Fund
participation from subsequent graphs and statistics.
Company stage
We categorise companies into seven stages of evolution (seed, venture,
growth, established, zombie, exited, dead) using over 40 proprietary criteria,
taking a balanced view with each decision.
Company sector
We tag companies with as many sectors from our proprietary sector matrix as
appropriate.
Valuations
An equity raise with a pre-money valuation that is at least 5% lower than the
recipient company’s previous post-money valuation is classed as a down
round; between 5% lower and 5% higher is classed as a flat round; at least
5% higher is classed as an up round.
A bumpy year:
2020 in review
The Government’s Future Fund boosts deal numbers to
a new high, but the ecosystem does well even without
this support. The value of investments fails to match up
with record levels set in 2019.
2
There was a great gasp for breath in March
when the UK was plunged into an indefinite,
supposedly short-term lockdown, with investors,
startups and advisors unsure of how to progress.
Supply chains seized up, whole industries
were stifled, consumer behaviour faltered. For
investors and founders alike, the uncertainty
in those first few weeks was little short of
paralysing.
As a first course of action, investors evaluated
their current portfolios, and dedicated time
and resources to these existing ventures, rather
than exposing themselves to new risk. Some
continued on with deals that had been in the
pipeline for many months and were nearing
completion, whilst others pulled the plug on all
new investments entirely.
In April 2020, we would not have predicted the
end result: a record year for deal numbers and
the second highest annual amount invested
(when we include figures from the Future Fund).
Indeed, in January we predicted the other way
round: that deal numbers might decline from
2019’s level but that the amount invested would
be superseded.
We won’t beat ourselves up too much for
not seeing coronavirus or the Government’s
response to it coming, but it is worth figuring
out what changed. In a nutshell, the capital
requirements of almost every high-growth
business. More companies needed external
finance, but many of them raised less. Some
deals happened that were smaller than they
would have been without the pandemic: office
expansions were postponed, international
expansions were deferred. But some deals
happened that weren’t anticipated: pivots had
to be financed, lost revenues made up for.
Into the gap where more capital seemed to be
needed, and uncertainty was claimed to be
having a paralysing effect, came the Future
Fund, a matched funding programme to support
the innovative, pre-profit businesses that were
unable to reach their full economic potential due
to the pandemic.
As of 31st January, the Future Fund is closed to
applications, but the complete list of recipients
of these convertible loan notes is yet to be
announced. For the sake of consistency, we’ve
excluded all Future Fund investments (even
those 114 that have been announced) from the
bulk of this report, but will be analysing the
Future Fund’s investments in other articles and
publications.
The Future Fund was a show of confidence
in the UK’s companies. But it isn’t without its
problems. As you’ll see in the contents of this
report, it seems that startups and scaleups that
were already on the equity ladder needed little
support in securing funding. Instead, it’s those
businesses that haven’t raised equity before—
the ones actively excluded from the Future
Fund—that struggled the most to find capital.
We began to sound the alarm about the seed
stage in 2019. During the pandemic, first-time
fundraisings have taken an even bigger hit. They
are the riskiest part of an already risky asset
class and tend to be backed by angels whose
investment habits can be most easily changed
Deal numbers rocket, thanks to the Future Fund
With the help of the Future Fund, UK companies secured a record number of
investments in 2020, up to 2,928. But even without the Future Fund, figures
almost matched up to levels seen in 2019, declining just 1%.
The UK secures its status as a tech nation
Through the coronavirus pandemic, the high-growth economy leant on
digital sectors for growth. Fintech, blockchain and digital security companies
received record investment, while artificial intelligence deals dropped off.
First-time rounds take a tumble, but angels prop them up
The number of companies raising equity finance for the first time declined
19% from 2019—the biggest year-on-year drop on record. Individual business
angels were the only investor type to increase their activity in this space.
The impact of coronavirus subsided quickly
37% of Q2 investments were deployed to companies that were experiencing
a negative impact at the hands of coronavirus—categorised as ‘survival
finance’. By Q4 2020, that figure had reduced to just 10%.
The year that ended in tiers
Year in review
Key findings
in response to macroeconomic conditions, so
some lockdown-induced retrenchment was
inevitable.
But we need a busy seed stage: the more you
put into the funnel, the more life-altering
technologies / jobs / unicorns you get out.
There’s no easy fix, however, and we’re expecting
the problem to persist into 2021.
Indeed there are plenty of (non-COVID) reasons
to be pessimistic about 2021—reasons which will
do nothing to help those early-stage companies.
The looming threat of changes to bring Capital
Gains Tax (CGT) in line with income tax is already
triggering some entrepreneurs to look into
exiting their businesses early. Certainly, the
changes will make the sacrifices that being an
entrepreneur entails even less appealing. Given
the state of the economy, every effort should be
being made to encourage entrepreneurship, not
stymie it.
It is for that same reason that the National
Security and Investment Bill also needs
rethinking. It creates an unnecessary and
additional bureaucratic obstacle to raising
investment when in 99.9% of cases, there is no
basis for a national security interest. There are
easier ways to monitor emerging technologies
and the people influencing them—not least of all,
a subscription to the Beauhurst platform.
Despite those depressing headwinds, the
UK’s high-growth ecosystem is crammed full
with exciting venture-stage and growth-stage
businesses. We expect to see a decent amount of
investment this year, with plenty of eye-catching
deals—there were six £100m+ deals in January
alone. And who knows, it may even become
possible this year for the investors writing those
cheques to meet their investee founders face to
face!
As ever, a big thanks to all those who have
contributed their time and expertise to this
report. We hope that you enjoy reading it as
much as we’ve enjoyed putting it together, and
are always keen to hear your feedback. Have any
questions or comments? Get in touch using the
details below.
“We need a busy seed stage: the more
you put into the funnel, the more life-
altering technologies / jobs / unicorns
you get out.”

info@beauhurst.com
 @Beauhurst
 company/beauhurst
 beauhurst
4
Investment
activity in 2020
1.1 Number of deals and amount raised excluding Future Fund (2011–2020)
Despite all the uncertainty and disruption that very
quickly defined 2020, investment into startups and
scaleups remained relatively steady. Excluding the
future fund, there were 1,957 equity investments
worth £9.8b announced to the media, down from
1,977 worth £11.7b in 2019. Against the odds,
investment activity remained resilient, despite
the global pandemic. The quarterly picture is
emphatic of that resilience. As expected, Q1 was
the busiest quarter for deal numbers and amount
invested, with £2.82b deployed across 511 rounds.
This almost meets the total number of equity deals
completed in the whole of 2011 (516).
Deal numbers dropped to 481 in Q2—the quarter
shrouded in the most uncertainty—and continued
at that rate through Q3 and Q4. In terms of the
amount invested, Q4 almost matched up to Q1,
with £2.80b of capital deployed.
Year in review
1,957
investments into UK
businesses in 2020
£9.8b
investments into UK
businesses in 2020
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£11.7b£2.1b£2.0b£3.6b£4.3b£4.4b£9.3b£7.8b£1.6b£9.8b1,447
516
1,610
1,614
775
1,863
1,882
1,042
1,957
1,977
Number of deals
Amount raised (£)
Q1 20
Q2 20
Q3 20
Q4 20
£2.82b£1.90b£2.30b£2.80b483
482
511
481
“[As the pandemic hit], Some continued on with deals
that had been in the pipeline for many months and were
nearing completion, whilst others pulled the plug on all
new investments entirely.”
Henry Whorwood, Head of Research & Consultancy
Beauhurst
5
Year in review
Investment
activity in 2020
The Future Fund provides convertible loan notes
(CLNs) to eligible companies that have been
negatively-impacted by the pandemic. If these
are not repaid, then they will convert to equity on
the recipients’ next fundraise. These transactions
require matched funding from third party investors.
On 17th December, the British Business Bank
(which manages the Future Fund) confirmed that
971 deals totalling £976m had been completed.1
We’ve picked up on 114 of these deals through
press mentions, but the remaining 857 are
currently unknown. In these cases, the whole round
probably went unannounced to the media, but it’s
possible that the third-party matched funding was
announced, whilst the Future Fund participation
remained undisclosed. Because of this, the
numbers here may include some double counting.
To avoid this as best we can, we’ve separated
out Future Fund figures, and excluded all known
rounds from the remainder of the report.
1.2 Number of deals and amount raised including Future Fund (2011–2020)
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£11.7b£2.1b£2.0b£3.6b£4.3b£4.4b£9.3b£7.8b£1.6b£9.8b1,447
516
1,610
1,614
775
1,863
1,882
1,042
1,957
1,977
£11.8b
2,928
Number of deals
Amount raised (£)
Amount raised (£)
including Future Fund
Number of deals
including Future Fund
Q1 20
Q2 20
Q3 20
Q4 20
£2.82b£1.90b£2.30b£2.80b483
482
511
481
733
941
743
£11.8b
invested into UK businesses
in 2020 (inc. Future Fund)
2,928
investments into UK businesses
in 2020 (inc. Future Fund)
“Only 114 of the 971 beneficiaries of the 2020 Future Fund
have been disclosed but if the full value of the Future Fund’s
investments are included—£976m plus at least £976m of
matched funding—the figures for 2020 total 2,928 deals
and £11.8b invested.”
1. https://www.british-business-bank.co.uk/future-fund-publishes-
diversity-data-of-companies-receiving-convertible-loan-agreements-6/
6
2.1 Number of deals by round number
2.2 Proportion of deals by round number
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
899
950
39
679
220
1,270
1,475
1,274
449
612
589
569
555
1,408
660
477
482
715
First round
Beyond
593
768
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0%
20%
40%
60%
80%
100%
29%
33%
32%
41%
44%
53%
57%
72%
92%
25%
1
2
3
4
5
6
7
8+
First-time
fundraisings
Although deal numbers were similar between 2019
and 2020 (-1%), the investment profiles were not.
In an exaggeration of an existing trend, first-time
fundraisings declined to 25% of all investments,
down from 29% in 2019, and 44% in 2015. That’s
482 first-time rounds completed in 2020, down
from 569 in 2019: a record 15% decrease.
The increase in proportion of fundraisings that
are second-time raises and beyond is indicative
of market maturation. But risk-averse sentiment
in the face of coronavirus has catalysed this trend,
with investors backing later-stage businesses with
more traction, that they may already have a stake
in. Through the pandemic, many investors shied
away from taking on new risk, and instead doubled
down on their existing portfolios, ensuring each
business had enough runway to survive lockdown
or—for those who were experiencing an increase in
demand—enough capital to scale rapidly.
Year in review
7
3.1 Proportion of deals by impact of coronavirus (April – December)
April
May
June
July
August
September October
November December
0%
20%
40%
60%
80%
100%
Positive (Recovery)
Potentially positive
Low
Moderate
Severe
Critical
Impact of
coronavirus
Since April, our in-house data team have been
diligently tracking the impact of coronavirus on the
UK’s 30,000+ ambitious companies, categorising
each business with one of six impact statuses.
This allows us to see what proportion of funding
rounds could be classed as ‘survival finance’, which
seem to be unaffected by the pandemic, and which
were for the purpose of capitalising on our new
way of life.
As expected, Q2 saw the highest proportion of
survival finance rounds: 37% of announced equity
fundraisings were deployed to companies with
a moderate, severe or critical COVID impact. By
Q3, that figure had fallen to 20%, and by Q4 just
10%. No fundraisings went to critically-impacted
businesses in Q4. Instead, the bulk went to low
impact businesses (55%), whilst 35% went to
positively-impacted, or recovering businesses.
Year in review
Positive recovery
A company that has experienced a negative impact of coronavirus,
but is now showing signs of recovery and is experiencing a
potentially positive impact.
Potentially positive impact
A company that can potentially grow its operations as a result of
these circumstances.
Low impact
A company that will be able to largely continue normal
operations, albeit possibly with safety measures, such as working
from home, in place.
Moderate impact
A company that has suffered disruption beyond mere
inconvenience but is mostly able to continue operations.
Severe impact
A company that has suffered serious disruption to its ability to
operate.
Critical impact
A company that is facing an existential threat to its ability to
continue in operation.
8
4.1 Number of deals by stage of evolution
4.2 Amount raised by stage of evolution
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
£2b
£4b
£6b
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
200
400
600
800
Seed
Venture
Growth
Established
4.3 Proportion of deals by investment brackets
NB. It’s important to note here that whilst the stage of a business may well be connected to the
number of deals and amount of investment that it has secured, a company can begin raising
equity finance at any stage of growth. This explains how first-time fundraisings have declined
whilst seed and venture-stage fundraisings have not.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£0–£499k
£500k–£1m
£1m–£2m
£2m–£5m
£5m–£10m
£10m–£50m
£50m+
Investment
stages
It’s positive to see seed and venture-stage
businesses secured more deals in 2020 than
in 2019. Although early-stage businesses are
agile in operational terms (small teams, digital
infrastructure) they are unlikely to have the
financial cushioning to adapt to changes in cash
flow, and will need to draw on external resources.
Indeed, 42% of venture-stage investments went to
negatively impacted businesses in Q2, higher than
any other stage of evolution.
In terms of the amount raised, venture-stage
businesses saw the highest spike in year-on-year
funding, from £2.22b to £2.82b. Meanwhile, the
value of growth-stage rounds decreased from 2019.
This closing in of venture and growth-stage funding
could be the intimation of a new trend, whereby
large-ticket investors are becoming increasingly
interested in earlier-stage businesses. Indeed, 20%
of venture-stage fundraisings in 2020 were closed
at £5m or more.
Year in review
9
5.1 Number of deals per region, 2011–2020
5.2 Number of deals by major cities
London
East of England
South East
Yorkshire and the Humber
East Midlands
Wales
Scotland
South West
Northern Ireland
West Midlands
North West
North East
31
70
152
930
69
25
58
126
15
42
78
18
3
37
24
97
43
48
126
29
66
68
238
184
120
78
67
106
51
23
29
74
917
Geography
As always, deal activity differed across the regions
in 2020. Deal numbers plateaued in London,
but the South East, Yorkshire and the Humber,
and Scotland all saw record investment activity.
Edinburgh was the epicentre of deal growth in
Scotland, with 103 deals worth £114m completed
in 2020, compared to 79 worth £143m in 2019.
At the other end of the scale, the East Midlands,
North West and Northern Ireland had relatively low
deal numbers—but none saw a particularly drastic
decline from 2019.
Despite the mass exodus from the office to the
home, funding distribution across major cities
remained fairly similar in 2020 to 2019. It seems the
communities in and around cities have remained
incredibly important during the remote work
era. It’s particularly positive to see there are no
significant downward trends in cities that suffered
the worst COVID outbreaks and the most severe
lockdowns (e.g. Birmingham and Manchester).
Year in review
Edinburgh
£114m
103 deals
Glasgow
£37.1m
43 deals
Belfast
£10.3m
12 deals
London
£6.61b
921 deals
Manchester
£191m
65 deals
Birmingham
£29.7m
16 deals
Cambridge
£329m
69 deals
Oxford
£710m
60 deals
Bristol
£174m
18 deals
Cardiff
£18.6m
27 deals
10
6.1 Deals in selected verticals over time
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
50
100
150
200
Artificial intelligence
Blockchain
Life sciences
Edtech
Digital security
E-health
Fintech
Sectors
and verticals
Whilst swathes of the hospitality, travel and
retail sectors were decimated in 2020, a rush to
digitisation has provided a record year for many
tech verticals. Fintech remained the most popular
sector, with a record 221 deals completed during
the year. With exceptional demand for healthcare
innovation, life sciences and e-health also grew,
marking a 15% and 49% increase from 2019,
respectively. Similarly, digital security saw huge
growth, with a record 82 investments worth £981m.
Meanwhile, despite school closures and a sudden
move to home-learning, edtech ended the year on
38 deals, down from 56 in 2019 and 67 in 2018.
But perhaps the most surprising change is a slump
in artificial intelligence deals. For the first time,
fewer rounds were secured by AI companies than
in the year prior. We expect this is a blip in the
otherwise meteoric rise of AI. But as blockchain
continues to capture investor interest, could 2019
have been the peak of inflated expectations for AI?
Year in review
“The pandemic has accelerated digital
transformation that was already underway
across the industry, and it is now largely
accepted across the board that cyber plays a
fundamental, and non-discretionary, role as
part of businesses’ wider ability to innovate
and stay agile.”
Saj Huq, Programme Director
LORCA
5%
growth in fintech deals from 2019–2020
46%
growth in digital security deals from 2019–2020
11
“History has shown that a lot of really great
opportunities present themselves in times of
economic uncertainty. We’ve already seen a
high volume of mission-driven, passionate
founders through the summer.”
Reece Chowdhry, Founding Partner
RLC Ventures
deals including PE/VC funds in 2020
839
7.1 Number of deals by fund type
Business angels
Corporate
Crowdfunding
PE/VC
Angel Networks
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
100
200
300
400
500
600
700
800
Investors
The two most prolific investor types, private equity
and venture capital firms, and crowdfunders,
remained buoyant through 2020, with just a 1.6%
and 2.5% drop from 2019, respectively. Corporate
funding activity declined at a more significant rate,
down 22% from 2019 and 5% from 2017/2018.
Over in the angel realm, activity amongst networks
and syndicates has declined since 2019. It’s worth
noting here that angel networks take their time to
announce which deals they have participated in. So
whilst the data currently shows a 37% decline from
2019, it will likely look a lot less dramatic as further
round details trickle in.
Individual business angels were the only investor
type to increase activity between 2019 and 2020.
In fact, they had their most active year yet, with
announced participation in 324 rounds, narrowly
surpassing the record 320 in 2017. We delve into
these trends in more detail in later chapters.
Year in review
deals backed by the crowd in 2020
424
12
8.1 Median valuation
8.3 Proportion of deals by round type
Valuations
Median valuation sizes continued to climb in 2020,
but at a slower rate than between 2016 and 2019.
There may have been a natural adjustment of
valuations in the first few weeks of coronavirus
chaos, but it seems they quickly returned to more
normal levels.
The mean company valuation paints a more
dramatic picture, with an 80% increase from 2019,
landing on £36.2m in 2020. This figure is driven by
an ever-increasing number of unicorn companies;
seven UK businesses joined the billion-dollar club
through the year. Some of these companies have
raised multiple rounds this year, further skewing
the figures. For example, Revolut was valued at
£3.52b in February and £3.98b in July. We also saw
the proportion of down rounds increase to 18%
in 2020, up from a low of 14% in 2017. Flat rounds
increased to a new high of 26%. Just 55% of deals
with a known valuation closed at a higher pre-
money than the previous post-money valuation.
Year in review
8.2 Mean valuation
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£2.21m£1.47m£1.22m£1.43m£2.09m£2.40m£3.42m£4.00m£4.42m£4.50m£36.2m£20.1m£19.8m£19.6m£11.5m£9.17m£7.66m£5.98m£9.08m£9.00m2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
NB. In order to present a more accurate picture, this graph includes unannounced
funding rounds, as well as those announced to the media. Unannounced funding rounds
are more likely to be flat or down rounds than announced funding rounds.
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0%
10%
20%
30%
40%
50%
60%
70%
Down round
Flat round
Up round
13
Female founders
Year in review
9.1 First-time fundraisings by gender of founding team
9.2 Proportion of deals by gender of founding team
9.3 Proportion of value by gender of founding team
Back in October, The Entrepreneurs Network
produced their Resilience and Recovery report
with Barclays. By analysing Beauhurst data
and conducting interviews with founders, they
were able to show that female-led, high-growth
companies experienced a disproportionately
negative impact from the pandemic.
Despite this, female-founded businesses showed
great resilience, and this has borne out in the
funding figures. First-time fundraisings into
female-founded companies dropped just 11%
between 2019 and 2020, compared with a 19%
decline for all-male-founded companies. This
represents a healthy pipeline of investable
female-led businesses.
Meanwhile, 22% of all announced equity deals
went to companies with a female founder,
on par with 2019 and the record, first set in
2016. In terms of deal value, 15p in every £1 of
investment went to female-founded startups,
just shy of the 16% record in 2016.
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
393
406
423
274
361
36
513
113
441
123
127
128
492
132
164
90
137
324
83
318
Female-founded
Male-founded
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
89%
82%
81%
82%
81%
78%
79%
79%
78%
78%
11%
18%
19%
18%
19%
22%
21%
21%
22%
22%
Female-founded
Male-founded
95%
90%
87%
89%
86%
84%
89%
87%
90%
85%
10%
13%
11%
14%
16%
11%
13%
10%
15%
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
14
The biggest deals of the year
Year in review
2020 was another strong year for the UK’s top
startup companies. As previously mentioned, we
welcomed seven new companies to the unicorn club,
and witnessed 39 megadeals (deals worth £50m+)
announced over the year. 13 of those moved into the
gigadeal category (£100m+).
Many of 2020’s megadeals took place pre-lockdown,
with 14 completed in Q1. The second and third
quarters were slower, with six and seven megadeals,
respectively, before picking up again with 12
completed in Q4.
Of course, the majority of these deals went to
companies based in the Capital (32) and the South
East (3). Trafford-based Receipt Bank was the only
northern company to secure a megadeal in 2020.
14 of the 39 megadeals went to companies operating
in fintech, whilst six went to digital security, and five
to artificial intelligence. Surprisingly, just two of the
announced megadeals were secured by life sciences
companies.
The largest round of the year (by quite some way)
was secured by challenger bank Revolut for £383m
in February. The second largest went to sister-led
Karma Kitchen in July, and totalled £252m.
10.1 Megadeals and gigadeals
Gigadeal
Megadeal
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
26
14
16
16
15
13
16
12
3
8
3
4
4
9
4
4
1
2
2
10.2 Megadeals over time (2020)
1 Jan
1 Mar
1 May
1 Jul
1 Sep
1 Nov
0
£100m
£200m
£300m
£400m
Venture
Growth
Established
deals worth £50m or more
completed in 2020
39
13
deals worth £100m or more
completed in 2020
15
10.4 Megadeals by sector
10.5 Most-funded companies of the year
10.3 Megadeals by location
£446m Revolut
Revolut operates a challenger bank. Through its
app, users can trade cryptocurrency, track and send
money, and complete a range of other consumer
financial services.
Total raised in 2020 £446m over 2 deals
Location London
Sector
Fintech
£386m OneTrust
OneTrust develops software designed to help users
manage their online security, privacy and third-party
risk—particularly through artificial intelligence.
Total raised in 2020 £386m over 2 deals
Location London
Sector Digital security
£365m Cazoo
Cazoo operates an online marketplace for second-
hand cars. In-house experts appraise each car and
then deliver it in as little as 72 hours.

Total raised in 2020 £365m over 3 deals
Location London
Sector Automotive
£270m Snyk
Snyk develops tools that help users to fix security
vulnerabilities in their open-source coding, and alert
them if issues occur. It reached unicorn status in just
five years.
Total raised in 2020 £270m over 2 deals
Location London
Sector Digital security
£252m Karma Kitchen
Karma Kitchen operates industrial kitchen spaces
which can be hired to businesses that do not have
facilities themselves, as well as offering equipment
hire, storage, ingredient supply, and cleaning.
Total raised in 2020 £252m over 1 deal
Location London
Sector Property/land management
£200m Gymshark
Gymshark creates a range of performance-focused
sportswear and accessories for men and women. Its
first ever equity investment, raised in 2020, valued
the company at over $1b.
Total raised in 2020 £200m over 1 deal
Location Birmingham
Sector Clothing
West
Midlands
2
South West
1
South East
3
North West
1
London
32
Fintech
13
Digital security
6
Internet
platform
3
Health
3
Recruitment
software
2
Energy
3
Automotive
4
AI
1
Clothing
1
Internet
hardware
1
Property/land
management
2
Sectors in focus
Healthcare was the star of 2020, but not all health
sectors fared well. Meanwhile, demand for digital
security services saw investment skyrocket, whilst social
impact funds are truly helping to ‘build back better’.
17
Ventures on a virus vendetta
Freya Hyde
The global coronavirus pandemic has put a
spotlight on healthcare sectors like never before.
Both global and national bodies have called
for increased focus and government spending
into healthcare. Despite some criticism for his
wide praise of China’s handling of COVID-19, Dr
Tedros Adhanom Ghebreyesus, WHO Director-
General, reviewed the lessons of the year: “First
and foremost, 2020 has shown that governments
must increase investment in public health, from
funding access to COVID vaccines for all people, to
making our systems better prepared to prevent
and respond to the next, inevitable, pandemic.”1
When the UK government announced £3b of
additional funding for the NHS in England in July,
many responded that it was not enough. While
Danny Mortimer, Chief Executive of the NHS
Confederation, welcomed the investment, he
said “We would expect this to be followed up soon
with the additional funding that will be required
to meet the extra costs of COVID-19.” 2
However, less discussed than public funding
is the continuing need for private equity
investment rounds into innovative healthcare
companies. In addition to the ongoing
development of novel technologies to support
a variety of health concerns, the pandemic
has inspired further innovations to deal with
COVID-19. Several of these have attracted
investors whose money can support further
research and scaling to meet pandemic
demand. While 2020 was a record high for
investment into UK pharmaceuticals, the year
was also interesting for other health sectors,
for investment both related and unrelated to
COVID-19. Unlike pharma, not all sectors of the
healthcare industry fared well in 2020.
COVID-19 and medtech
Covering clinical diagnostics, medical devices
and instrumentation (but not pharmaceuticals,
which remains a separate sector outside
this analysis), Medtech is vital to all stages of
healthcare, from prevention and diagnosis
to treatment and care. Without counting the
Government’s Future Fund, the sector raised
£192m of investment across 82 rounds in 2020.
Some of these investments were indeed
secured by companies with innovations that
fight the pandemic. In 2020, Iceni Diagnostics,
a University of East Anglia spinout, worked
on a rapid lateral flow test for COVID-19 that
gives results in just 15 minutes. The test, which
resembles a pregnancy test with its ‘red line’
output, was first backed by a small Innovate UK
grant in May.
In December, Iceni Diagnostics received £2m
of equity investment to build commercial
infrastructure and take on more staff. Co-
founder Professor Rob Field stated that “There’s
a vast, global potential in the application of our
unique technology. We are using it to tackle COVID
now, but it will also produce better vaccines and
Sectors in focus


1. https://www.who.int/news/item/30-12-2020-covid-19-anniversary-and-looking-forward-to-2021
2. https://www.nhsconfed.org/news/2020/11/3bn-spending-review
18
new diagnostic and therapeutic products in the
future.” 3
Cambridge Respiratory Innovations has received
11 grants since being founded in 2013, but 2020
was its first year for equity fundraising, securing
£1.7m across two rounds. The company is
currently working with NHS Trusts to supply its
handheld monitoring device, N-Tidal, for use in
respiratory monitoring, helping to identify when
a patient with COVID-19 is deteriorating and may
require ventilator support.
Surprisingly, however, it seems that the largest
investment rounds into medtech of the year
were not related to COVID-19. Bit Bio raised a
significant £32.6m in June and is a company
that develops research tools and technologies
where human cells are reprogrammed and
produced for cell therapy. The second largest
investment of £28.7m went to 2012 University
of Oxford spinout Perspectum, which delivers
technologies to aid in the diagnosis and care of
patients with liver disease.
Moreover, a total investment of £192m for the
year is the lowest it’s been for the sector since
2016, despite a great number of innovative
products, services and solutions in development.
Investors into medtech usually look for
companies with clinical evidence to prove their
novel product or technology is valuable, as well
as regulatory approval and patents. With many
non-coronavirus laboratory projects being shut
down, and as regulatory approval continues to
be a difficult process for early-stage companies,
these criteria have been all the more challenging
to meet and may explain the slow down in
investment in 2020.
The rise of e-health?
Coming into existence in the 1990s, the e-health
sector refers to the use of information and
communication technology in relation to
healthcare practices. It includes a range of
services and systems such as health informatics,
telemedicine, and electronic health records. The
year 2020 saw 61 announced equity fundraisings
into e-health companies, totalling £250m. This
compares with £110m over 46 rounds in 2018
and £52.5m over 39 rounds in 2016. The largest
investment of the year was £53m and secured
by Cera4 to fund expansion. The company offers
technology that arranges home care for the
elderly. Based in London, Cera has certainly
shown promise since its early days, attending
three accelerators in its first couple of years. In
2020, the company featured on the Startups 100
and Deloitte Fast 50 high-growth lists.
Other notable deals in the e-health sector in
2020 include £23m for Lumeon and £22.7m
for Your.MD, also both London-based. Used by
clients across Europe and the US, Lumeon’s
software improves administrative efficiency and
helps track the progress of patients. Meanwhile,
Your.MD offers an app called Healthily that
uses artificial intelligence, allowing users to
check their symptoms before seeing a doctor
and providing plans and advice for self-care.
A significant chunk of investment, £95.7m,
into e-health in 2020 actually occurred in Q1,
suggesting that growing interest and demand for
the sector was occurring before the pandemic
took hold in the UK. On a global scale, the WHO
has certainly urged the importance of e-health
for a number of years before the pandemic,
believing that “The use and scale up of digital
11.2 Number and amount raised by e-health companies
11.1 Number and amount raised by medtech companies
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£250m£110m£562m£163m£26.9m£52.5m£23.7m12.2£8.88m£4.69m30
29
39
41
61
7
46
56
11
13
Number of deals
Amount raised (£)
£117m£192m£432m£170m£226m£150m£205m£304m£74.1m£71.8m73
61
78
79
44
94
82
47
49
87
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Number of deals
Amount raised (£)
3. https://www.cambridgenetwork.co.uk/news/uk-rapid-covid-test-firm-iceni-diagnostics-announces-%C2%A32m-investment
4. Cera shares significant shareholders with Beauhurst, but has had no editorial input to this article
health solutions can revolutionize how people
worldwide achieve higher standards of health,
and access services to promote and protect their
health and well-being.” 5 A multiyear upward
trend and the strength of pre-pandemic 2020
for e-health investment indicates it is not solely
COVID-19 driving the rise of the sector.
Yet COVID-19 may mean this already rapidly
growing sector will expand even faster. While
the value of investments actually dropped quite
sharply in Q2 and Q3 of 2020, it climbed back
up to £86.4m in Q4. In October, Push Doctor
received £13.7m of investment for its product:
an online GP service where patients can have
video consultations with NHS-trained clinicians.
In 2021, an unprecedented level of pressure
continues to face the NHS as millions are still not
receiving care outside of COVID-19, meaning that
e-health and digital services may become not
only desirable, but essential to society.
Increased demand may require companies
to take on new investment to support further
research, as well to allow for rapid and effective
scaling. One such example is Welsh company
Bond Digital Health, which has been developing
the digital element of a rapid testing system to
help authorities track and monitor positive cases
and hotspots of COVID-19. With the backing
of Wealth Club and the Development Bank of
Wales, the company raised £700k in April for
R&D and £1.2m in November to fund product
development and expansion into new markets.
The overall diagnosis for the healthcare
industry
Last year demonstrated the importance of
non-pharmaceutical interventions such as
social distancing and handwashing as well as
the development of a vaccine. At the same time,
COVID-19 has presented the medtech industry
with many challenges, ranging from huge
delivery pressures to being unable to access
resources and laboratory space when research is
not coronavirus-related. Going forward, however,
medtech will play an even more crucial function
in disease diagnosis and care, especially as
the population ages. Investment opportunities
may indeed go on the rise again, particularly
as artificial intelligence, nanotechnology and
robotics emerge in the sector. In 2020, nine of
the 82 fundraising rounds into medtech were
secured by companies using AI.
Turning to e-health, the future looks promising.
Although the NHS has been viewed as slow to
adopt e-health innovations compared to foreign
counterparts, the sector is rapidly growing.
With COVID-19 changing how the UK conducts
its healthcare permanently, and with secure
digitised health services more in demand than
ever, it is safe to say that e-health is here to stay.
Iceni Diagnostics
Iceni Diagnostics develops carbohydrate-
based therapeutics and diagnostics
for disease. The company developed a
COVID-19 test that diagnoses through
glycans, rather than genetic code.

Date founded March 2014
Location Norwich
Number of employees 10–15
Cambridge Respiratory
Innovations
Cambridge Respiratory Innovations
develops digital cardio-respiratory
devices. It has supplied NHS trusts
with N-Tidal devices for live respiratory
monitoring throughout COVID-19.
Date founded April 2013
Location Cambridge
Number of employees 10–15
Your.MD
Your.MD develops a health assistant
app named Healthily, that allows users
to diagnose health issues. Healthily
allows organisations to reduce the risk
of COVID-19 spreading by offering in-app
diagnostics and screening.
Date founded October 2013
Location London
Number of employees 100–125
Lumeon
Lumeon has developed web-based
software to track the progress of patients
and administration tasks. Lumeon has
provided numerous COVID-19 solutions,
such as vaccine management, fielding
test results, and home monitoring.
Date founded August 2005
Location London
Number of employees 100–125
Push Doctor
Push Doctor provides an on-demand
online GP surgery. Push Doctor has
partnered with the NHS and various
pharmacies to offer digital-first, COVID-
safe consultations, aiming to reduce
strain on health services.
Date founded
July 2013
Location Manchester
Number of employees 75–100
Bond Digital Health
Bond Digital Health has developed a
digital connectivity and data platform
to enhance lateral flow tests. Transform
allows test data to be captured at
the point of use, stored securely and
accessed and shared by end users.
Date founded
June 2015
Location Cardiff
Number of employees 15–25
Top healthcare companies
“First and foremost, 2020 has shown
that governments must increase
investment in public health, from
funding access to COVID vaccines
for all people, to making our systems
better prepared to prevent and respond
to the next, inevitable, pandemic.”
Tedros Adhanom Ghebreyesus,
Director General, WHO
5. https://www.who.int/health-topics/digital-health#tab=tab_1
20
Digital security in the WFH era
James Richardson
The coronavirus pandemic and its impact on
our everyday interactions, both social and
professional, has further accelerated our reliance
on virtual spaces. An even greater proportion
of our lives are now spent online, partially
or entirely replacing time which we would
previously have spent interacting physically.
The information exchanged and stored virtually
is often sensitive in a personal or commercial
context, and so it is vital that it is held securely.
We trust that what we put online will only be
seen by those we intend to see it; indeed we
have few alternatives. Similarly, we trust that the
applications required for home working, remote
collaboration, and communication are reliable.
The brief outage of almost all Google services
worldwide in December 2020 illustrated just
how dependent we are on this technology, and
highlighted the potential disruption and damage
a malicious attack can cause, when countless
organisations suddenly found themselves
unable to communicate.
Saj Huq, programme director at the London
Office for Rapid Cybersecurity Advancement
(LORCA), highlights the role coronavirus has
played in shaping the future of the sector: “The
pandemic has accelerated digital transformation
that was already underway across the industry,
and it is now largely accepted across the board
that cyber plays a fundamental, and non-
discretionary, role as part of businesses’ wider
ability to innovate and stay agile.”
In short, as the stakes in our online world have
grown, so too has the need for reliable and
secure digital services.
Impact of COVID on digital security companies
This increased reliance on digital security has led
to an overall positive impact on the companies
in this sector. In April 2020, 40% of digital
12.1 Number and amount raised by digital security companies
Sectors in focus
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£115m£536m£291m£232m£981m£129m£35.6m£16.1m£71.2m£98.8m82
54
31
56
57
28
10
23
68
18
Number of deals
Amount raised (£)
21
security companies were potentially positively
impacted by the coronavirus pandemic, rising
to 45% by the end of the year, primarily through
increased demand for their services (36%)
and growth in job opportunities (26%). This
is in contrast with an average of just 16% of
all Beauhurst-tracked companies, and 23% of
technology companies, potentially positively
impacted.
Given the broadly positive impact of the
pandemic, it is unsurprising that 2020 was a
record year for investment into this sector.
The number of deals increased 46% from 2019
to 2020, to an all time high of 82, in contrast
with a 18% decrease from 2018 to 2019. The
total amount invested increased 83% from
2019 to a record £981m in 2020. What is not so
clear, however, is if this huge growth is solely
a direct result of the pandemic, or simply the
continuation of the existing trend of increasing
cash being invested into these companies.
As in most sectors, the UK lockdown did
appear to stymie investment activity in digital
security. Q2 2020 saw a significant drop from
Q1 levels (from 21 deals totalling £319m to 16
deals totalling £130m) as the true impact of the
pandemic and resulting lockdown hit home.
However, both the number of deals and the
amount raised remained higher than Q4 2019,
and recovered into Q3 and Q4 2020, indicating
that the initial shock felt across the ecosystem
had minimal impact on the sector beyond this.
Digital security unicorns
Two digital security companies joined the UK’s
unicorn club in 2020: Snyk and OneTrust joined
University of Cambridge spinout Darktrace to
make three digital security companies in the
now 23-strong herd. Both of these companies
completed their first raise at a valuation over
$1b before the effects of the pandemic were felt
strongly in the UK.
Snyk raised $150m in January 2020, and a
further $200m in September 2020, bringing its
valuation to a reported $2.6b. OneTrust also
raised two megarounds in 2020: a first $210m
round in February 2020, and a further $300m in
December, resulting in a $5.1b valuation.
Commenting on their second round in 2020,
Snyk CEO Peter McKay hinted that the pandemic
was a factor, saying that they saw business pick
up through lockdown, and correspondingly
expanded their team: ‘our business never slowed
down… We’ve just capitalized on this accelerated
shift to the cloud and modern cloud-native
applications’. 1
That being said, investors only commit cheques
of this magnitude to companies who they
believe have significant long-term growth
potential, indicating that the importance of
these companies is here to stay, and won’t
diminish once the effects of the pandemic have
faded.
First-time raises in 2020
However, when we look at digital security
companies raising investment for the first time, a
slightly different picture emerges. The number of
first-time fundraisings increased 42% from 2019
to 2020 (from 12 to 17), but this is still well below
the all-time high of 28 in 2016. The total amount
of first-time raises dropped a huge 94%, from the
all time high of £265m in 2019 to just £14.7m in
1. https://techcrunch.com/2020/09/09/snyk-bags-another-200m-at-2-6b-valuation-9-months-after-last-raise/
12.2 First-time numbers and amount raised by digital security companies
“Our business never slowed down … We’ve just capitalized on
this accelerated shift to the cloud and modern cloud-native
applications.”
Peter McKay, CEO
Snyk
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
£265m£55.0m£14.7m£11.9m£56.4m£53.7m£35.5m£49.7m£9.56m£3.81m28
15
17
17
14
12
12
12
8
22
Number of deals
Amount raised (£)
22
2020. This is partly due to 2019’s numbers being
skewed by two first-time megaround raises:
OneTrust’s $200m and Onecom Group’s £100m
(combined equity and loan) rounds, both in July
2019. Excluding these two reduces 2019’s total to
just £5.4m, painting a more positive picture for
2020. Still, 2020’s number is well below the next
highest figure of £56.4m in 2015.
Across the board, we have seen the number of
companies raising equity investment for the first
time continue to drop in 2020. Whilst this trend
has been apparent over the past few years, the
pandemic has only exacerbated this worrying
situation, as investors become more risk-averse
and seek to deploy capital into their existing
portfolio companies.
It is, therefore, a promising sign to see the
digital security sector buck this trend in 2020,
but, as Huq comments, it is not out of the
woods yet: “Whilst we do not expect there to be
a downturn in market appetite for new products
within digital security post-COVID-19, there are
significant risks to the early-stage ecosystem if
the current investment trends continue, with the
sustainability of the overall innovation pipeline
under threat.”
Digital security in the future
The question, then, is what will happen in
the digital security sector in 2021. Will we see
another record year for the amount of money
invested, continuing the trend? Or has the
pandemic artificially accelerated investment in
the sector to unsustainable levels?
As we’re all aware, the immediate effects of
the pandemic aren’t fading just yet, and we
are likely to be reliant on virtual working and
communication methods for many months—if
not years—to come. Beyond this, the longer-
term shift it has caused in our approaches to
working from home and international travel will
guarantee a continuing need for heightened
security and reliability of online services, beyond
the time when restrictions are relaxed. The
amount invested in this sector has significantly
increased every year since 2013, and 2020’s
figures are no different. Of course, the pandemic
is likely to have played a part in this, and fully
decoupling its effects is impossible, but the
simple explanation of the continuation of the
trend suffices to explain 2020’s record numbers
by itself.
Another bumper year for the digital security
sector is therefore on the cards for 2021; with
over 350 companies at the earlier stages of
growth (seed and venture) in the UK, there are
plenty of investable companies in the pipeline—
although it remains to be seen if investors will
start becoming more risk-hungry and increase
investment in these younger businesses.
More megadeals are certainly possible too—a
handful of companies, such as Quantexa and
Privitar, have reached valuations of hundreds
of millions of pounds and recently raised
investment to fuel further growth and expansion.
These companies may well join the unicorn herd
with further raises in 2021.
Snyk
Snyk develops tools that help users to fix
security vulnerabilities in their open-
source coding, and alert them if issues
occur. It reached unicorn status in just
five years.
Date founded
July 2015
Location London
Number of employees 450–500
OneTrust
OneTrust develops a platform to
help users manage and secure their
cybersecurity, privacy, and third-party
risk. Over 7,500 customers use OneTrust
to comply with privacy and security laws.
Date founded September 2016
Location London
Number of employees 1,300–1,400
Darktrace
Darktrace has developed security
software to identify behavioural
anomalies, alerting clients to potential
security threats. It was the first company
to develop an AI system for cybersecurity.
Date founded
June 2013
Location Cambridge
Number of employees 1,500
Onecom
Onecom is the UK’s largest independent
telecommunications provider, delivering
communications and connectivity
solutions.
Date founded
June 2012
Location Winchester
Number of employees 400–450
Quantexa
Quantexa develops technology to secure
organisations’ data and flag potential
illegal activity. It works with sectors
handling large volumes of data, such as
banking, public sector, and e-commerce.
Date founded March 2016
Location London
Number of employees 250–300
Privitar
Privitar’s technology protects customer
data to allow the safe and ethical mining
of datasets, primarily across sectors such
as financial services, healthcare, and
retail.
Date founded November 2014
Location London
Number of employees 200–250
Top digital security companies
“There are significant risks to the
early-stage ecosystem if the current
investment trends continue, with
the sustainability of the overall
innovation pipeline under threat.”
Saj Huq, Programme Director
LORCA
23
Lucy Wilson
For many, 2020 was and always will be the year
of COVID. But, it was also a year of devastating
wildfires and extreme weather events brought
on by our escalating climate crisis.
It was the year the fast fashion industry came
under greater scrutiny, following allegations
of human rights abuses in the supply chains
of popular UK brand Boohoo. And it was the
year the US formally withdrew from the Paris
Agreement on climate change, a day after the
country’s presidential election, in which Kamala
Harris was voted the first female, Black, and
South Asian Vice President of the United States.
Alongside all this, there were innovative
companies working hard to address some of
the world’s most pressing issues, from social
enterprises reinvesting their profits into local
community programmes, to certified B Corps
pledging carbon neutrality, and retraining prison
leavers and homeless people. Supporting these
companies were a host of equally purpose-
driven investors, local enterprise partnerships,
and accelerator programmes, all of which help
make up the UK’s impact landscape.
Impact investing is investing with the intention
to generate positive, measurable social and
environmental impact, alongside a financial
return. This dual objective of reaching financial
goals and having a positive impact is what sets it
apart from other forms of investment.
Whilst it’s difficult to establish a precise
definition of ‘positive impact’, our analysis
includes funds that have explicitly stated that a
company’s impact on the planet or its people is
central to their decision to invest, as opposed
to it being a by-product of their philosophy or
sector restrictions. It’s also not the same as ESG,
which is instead predominantly a risk framework
of environmental, social, and governance factors
to inform companies’ decision-making.
So, how did impact investing fare in 2020: has
social responsibility been put on the back burner
amidst the financial strains of the pandemic,
or is the need for positive change as clear to
investors as ever?
Impact equity trends in a year like no other
Impact investing has become increasingly
popular over the last decade. Within the UK
private market, we’ve seen a steady increase in
deals involving impact funds since 2011, which
saw just 11 fundraisings, totalling £58.9m. Both
the number and value of impact investments
peaked in 2019, at 70 deals, worth £174m in total.
Deal numbers dropped off in 2020, but they
remained high at 66 equity investments
completed over the course of the year. This
small, 6% decline is in keeping with overall
funding figures, indicating that purpose-driven
businesses have not suffered disproportionately
to the wider high-growth landscape during
COVID. But whilst the frequency of deals has not
changed as much as we might have expected
since 2019, the value of these investments still
fell by a third, landing at £116m. As a result, the
average deal size in 2020 stood at just £1.76m,
compared to £2.49m in the year before.
Impact investment has begun to enter the
Sectors in focus
Money on a mission: impact investing in 2020
24
mainstream in recent years, but many would
argue it still has a long way to go. Perhaps
if investors are becoming more risk-averse
during the pandemic, we could soon be seeing
a renewed vigour in impact funding, as it’s
becoming increasingly clear that investments
into businesses creating a positive impact on the
world are, in fact, a safer bet.

According to ReGenerate, an organisation
supporting the impact landscape, “COVID-19
has helped people realise that there is more to
business than profit, and that companies have
a huge role to play in improving the quality
of people’s lives and the health of the planet.
Moreover, the pandemic has strengthened the
now overwhelming case that purpose-driven
companies not only do good, but they are also
more likely to be successful and sustainable.”

Game changers
At present, there are 39 active funds matching
our definition of an impact investor in the UK
equity market. These investors are taking on
social responsibility in sectors ranging from
fishing and urban farming, to microfinance and
affordable housing. Notably, the vast majority
of these funds are deploying capital in the
environmental and sustainability space, with 13
of them making it their sole focus.

But the spread of the Black Lives Matter
movement across the globe in 2020 has also
fueled greater interest in the diversity and
inclusion (D&I) space. We expect to see this
translate to a heightened focus on D&I investing
in the coming years. There are, however, already
a handful of active funds dedicated to this cause.
Impact X is one such fund, providing venture
capital to underrepresented entrepreneurs
across Europe. Then there’s Big Issue Invest, a
non-profit fund helping to scale up charities
and social enterprises that are serving a
disadvantaged population, for instance through
financial inclusion or education programmes.
Meanwhile, fellow non-profit iAMDigital, a
partnership between Creative England and the
Social Tech Trust, is another champion of D&I
in the startup world. The organisation invests
specifically in companies focused on increasing
digital skills and inclusion in the UK, outside of
London.
Despite concerns back in March, many of the
UK’s impact funds have continued investing
throughout COVID. The most active investor in
2020 was Ascension Ventures, an early-stage VC
built by exited entrepreneurs to back the next
generation of tech and impact founders. Fair By
Design, managed by Ascension, participated
in eight fundraisings last year with ambitious
startups whose products and services benefit
low-income families and address the ‘Poverty
Premium’.
Emma Steele, Investment Director at Ascension
Ventures, explained: “COVID has unfortunately
meant a lot of financially vulnerable families have
had to suffer huge shocks. Much of our portfolio
has been busier than ever, as we think COVID is
throwing the impact of financial vulnerability
much higher in people’s agenda, whether it be
individuals, employers or local government. For
Fair By Design, this has reinforced the sector
13.2 Number and amount of cleantech investments
13.1 Number and amount of impact investments
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£180m£241m£200m£145m£270m£186m£181m£303m£629m£524m78
53
68
96
66
84
64
63
87
90
Number of deals
Amount raised (£)
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£58.9m£102m£34.8m£49.1m£28.7m£58.5m£43.9m£144m£174m£116m11
18
Number of deals
Amount raised (£)
26
36
30
44
44
51
70
66
“COVID-19 has helped people realise
that there is more to business than
profit.”
Regenerate
25
verticals we were focusing on, but has also led us
to explore some of the ancillary areas where we
can help. As for deal flow, we’re seeing more great
founders building impact businesses, and more
VCs competing to invest in them, which is fantastic
for the ecosystem.”
Of the UK’s active impact funds, 24 are private
equity or venture capital firms like Ascension—
unsurprisingly, this makes them the most
common type of impact investor at 60% of the
market. Angel networks are also central to the
impact market, however, with Green Angel
Syndicate supporting promising entrepreneurs
in the UK’s green economy across seven
announced equity funding rounds in 2020.
Lauren Stewart, Founder and CEO of Invigorate,
an online advisory marketplace for scaling
businesses, shares her views on the topic:
“When COVID first entered the scene, the business
world went into crisis mode, and with so much
noise and chaos, impact investing got put
on the back burner for a while. But, looking
forward, I also think it has presented us with a
great opportunity, a clean slate—we’re already
seeing some really innovative companies and
technologies emerging in the impact space,
prompted by the pandemic.”
“I’d like to see some of the bigger players and
institutional investors in the market stepping up
in 2021, and getting behind these purpose-driven
businesses that are solving large societal issues.”
The green economy
Investment into cleantech reached record levels
in 2019 and, with so many of the UK’s impact
funds currently focused on the sector, 2020 was
another strong year for startups and scaleups
contributing to the green economy. Impact
investors have funded a long list of exciting UK
companies and disruptive technologies this past
year, in various verticals within the sector.

Piclo, for instance, is developing a peer-to-peer
renewable energy marketplace that allows
producers to sell electricity directly to local
customers.
Most recently, in December, Piclo secured a
£1.5m equity deal with cleantech investor Clean
Growth Fund. The startup has also attended
numerous accelerator programmes, including
the Climate-KIC Accelerator and Bethnal Green
Ventures, designed to nurture young companies
in the impact space.
Another alum of the Climate-KIC Accelerator is
Econic Technologies. The Imperial spinout has
found a way to reduce our reliance on fossil fuels
by turning waste CO2 into polymers, for use in
creating everyday plastics. In November 2020, it
secured a £3.2m equity deal, in a funding round
that included follow-on investor OGCI Climate
Investments. This is the investment arm of OGCI,
an initiative led by oil and gas corporations to
reduce greenhouse gas emissions.
Meanwhile, back in April, Thrift+ secured a £950k
equity deal involving three UK impact funds—
Clearly Social Angels, Green Angel Syndicate,
and Triple Point Impact EIS. The company’s
online charity shop platform allows users to
donate and buy used clothing and accessories,
and gives a portion of profits to charities
selected by its customers. Unlike traditional
charity shops, Thrift+ has been able to continue
its operations throughout the pandemic, and
should benefit from the huge surge in donations
we’ve seen during each lockdown.
Also investing during COVID, Turquoise
International’s Low Carbon Innovation Fund
supported several cleantech projects last year.
This included a £160k follow-on investment in
September, into AI startup Spark. Spark aims
to accelerate electric vehicle (EV) adoption by
producing highly accurate, personalised range
predictions through its software. The company
was listed on 1000 Companies to Inspire Britain
in 2017, and has attended five accelerator
programmes to date.
And then there’s StormHarvester, an IoT
software company that has developed an
automated water management platform to
prevent pollution and flooding. The Belfast-
based startup secured a £1.82m equity
fundraising in July, with involvement from Green
Angel Syndicate. Speaking to the London-based
angel network, they emphasised how:
“The members of Green Angel Syndicate have a
common motivation to support early companies
in the fight against climate change. That hasn’t
changed due to the pandemic and it will be even
more important as we emerge and create jobs,
and reboot the economy going forward.”
Future-proofing in 2021
Going beyond simple ESG box-ticking, the UK is
home to an ambitious ecosystem of startups and
scaleups that put impact at the heart of their
business models. Despite the slight drop-off in
deals during 2020, COVID-19 has made the need
for purpose-driven businesses, and the funds
that back them, all the more pressing.
This is a critical moment in the impact space,
with 2020 demonstrating the crucial role
that technology and innovation can play in
supporting the planet and its people. We hope
to see more funds joining the ranks of socially
responsible investors this year, as the UK
embarks on its mission to ‘build back better’.
“I’d like to see some of the bigger players and institutional investors
in the market stepping up in 2021, and getting behind these purpose-
driven businesses that are solving large societal issues.”
Lauren Stewart, Founder & CEO
Invigorate
Investors in focus
Crowdfunding platforms retain their crown as most
active investors and, with a merger ahead, could dwarf
other funds. Angels storm ahead, and we compare
startup valuations to the public market bounce back.
27
Top investors by UK deal numbers
Investors in focus
Last year, Crowdcube topped the charts as the
most active investor in the UK’s high-growth
space, facilitating 203 equity investments
backed by the public. Ex-rival, and now potential
partner platform, Seedrs came in a close second
with 179 investments through the year.
The crowdfunding platforms announced plans
to merge, back in October. This is still under
investigation by the Competition and Markets
Authority (CMA), but there’s no doubt that the
deal activity of the resulting behemoth would
dwarf that of all other UK investors.
In fourth place, and taking the title of the most
active UK venture capital firm in 2020, is Mercia
Asset Management, with 102. Mercia invests
through a number of funds, including NPIF
Equity Finance, SME Innovation Fund, and
Mercia EIS Fund. As always, the investment
arms of devolved administrations—Scottish
Enterprise and the Development Bank of Wales—
rank highly, with 156 and 52 equity investments,
respectively.
This ranking excludes any deals that were known
to include Future Fund participation.
14.1 Top investors by UK deal numbers
30
32
37
44
52
77
102
156
179
203
CrowdcubeSeedrsSeedcampMaven Capital PartnersSFC CapitalBGFDevelopment Bank of WalesSyndicateRoomMercia Asset ManagementScottish EnterpriseThis chart was corrected on 22.02.2021 to show that Scottish Enterprise invested 156 deals, and Mercia Asset Management 102,
at time of original data export
Crowdcube Top investor into seed-stage companies
Crowdcube operates an online equity crowdfunding platform. In October 2020,
Crowdcube announced that it would be merging with rival platform Seedrs.
Over £1b has been invested through Crowdcube since 2009.
Number of seed investments in 2020 117
Notable 2020 investees Miso Robotics, Clim8 Invest, Kvasir Analytics
Ticket size £50k–£8m
Scottish Enterprise Top investor into venture-stage companies
Scottish Enterprise is a devolved government fund, investing in companies
based in Scotland through both equity and debt investment. It has invested
over £394m into over 180 high-growth, private companies.
Number of venture investments in 2020 91
Notable 2020 investees TravelNest, BDD, Talking Medicines
Ticket size £10k–£10m
BGF Top investor into established-stage companies
BGF was founded by leading UK banks following the 2008 financial crisis. It
invests primarily in growth-stage and established businesses, and has invested
over £2b into more than 300 companies since 2011.
Number of established investments in 2020 11
Notable 2020 investees Yorkshire Wildlife Park, Decora, Emma Bridgewater
Ticket size £1m–£15m
28
UK crowdfunding
Investors in focus
Crowdfunding fared well through 2020, with
424 deals completed down from a high of 435 in
2019. Activity picked up towards the end of the
year, with 131 equity deals completed in Q4.
The CMA is still investigating the planned merger
between Crowdcube and Seedrs, on the grounds
that it will “give rise to a realistic prospect of
a substantial lessening of competition in the
supply of equity crowdfunding platforms”. There
are a handful of other UK platforms, such as
AngelsDen, Crowd2Fund and Growthdeck, but
none as far-reaching as Seedrs and Crowdcube.
Meanwhile, Crowdcube has claimed there
is no threat to competition, because it is
institutional investors with which the platforms
are competing, not each other: “The proposed
merger will result in no substantial lessening of
competition because [...] the merged entity will
continue to face strong competitive constraints
from incumbent forms of equity finance provision
including venture capital firms and business
angels.”
It’s safe to say that, by next year, the crowd-
funding landscape could look entirely different.
15.1 Crowdfunding deal numbers over time, all platforms
15.1 Crowdfunding deal numbers, major platforms
15.2 Crowdfunding amount invested, major platforms
2018 Q2
2018 Q4
2019 Q2
2019 Q4
2020 Q2
2020 Q4
145
105
108
94
94
93
131
113
91
91
80
83
Crowdcube
203 deals, of which 14 pre-emptions
Seedrs
179 deals, of which 36 pre-emptions
Crowdcube
£126m, inc. £485k pre-emptions
Seedrs
£104m, inc. £1.29m pre-emptions
29
Angels in the cloud: wealthy individuals
back early-stage business from afar
Hannah Skingle
Over the past two decades, business angels
have become an integral part of the UK’s startup
ecosystem, funneling their own earnings into
risky ventures in exchange for equity, and a
potentially large return down the line.
As institutional funds have increasingly drifted
towards larger ticket prices, and focussed more
on later-stage investments, angels have been
a mainstay of the early-stage ecosystem. Not
only do they provide cash to fuel growth, but
also frequently provide support, guidance,
experience and access to vast business networks.
As Beauhurst data shows, the UK’s most prolific
business angels are increasingly starting to
resemble those in the US market—high-profile,
named individuals, championing particular
sectors.
A diverging market
We’re starting to see a separation of classes
occur within the angel ecosystem. There is no
absolute separation between these segments,
indeed many angels will not fit neatly into one,
but they are becoming increasingly distinct,
helpful lenses through which to look.
At one end, we have crowd-angels. These
people tend to be contributing a couple of
thousand pounds to crowdfunding campaigns.
They probably have a day job and a bit of
spare capital to invest in startups, on the off
chance that they might make back a few grand.
Crowdfunders may also be motivated by non-
financial aspects, such as becoming a brand
ambassador, receiving early access to new
features, or getting special deals or discounts on
products.
Mid-level angels typically invest via networks,
but may also have their own deal flow through
industry connections. They may have exited
their own business, have greater disposable
income than the average crowdfunder, and put
more time aside to vet and support investments.
Some will have a diverse portfolio with a couple
of dozen companies.
At the upper end of the scale lie super-angels.
These are ultra-high-net-worth (UHNW)
individuals who have substantial disposable
income and dedicate a significant portion
of their time to investing and supporting
businesses. They have the greatest appetite for
risk and will have tens, perhaps even hundreds
of companies, in their portfolio. Over time,
they’ve become well-known in the industry with
vast networks as well as relationships with VC
firms and adjacent funds.
Although any individual can look to invest in a
private company, it’s the super-angels that are
most likely to be announced in a fundraising.
The media doesn’t care if Joe Bloggs from
Bolton has put £5k into a blockchain startup. But
replace Joe Bloggs for Alex Chesterman, and
£5k for £100k, and you have a totally different
story. That’s a vote of confidence in the business
that the founders themselves will likely want to
shout about, and the media want to know about.
This is the most likely kind of individual to fall
into this investor category: ultra-high-net-worth,
increasingly high profile.
A maturing market
As the UK’s early-stage startup scene matures,
and global wealth continues to climb, there’s an
increasing roster of super-angels in the space. At
Beauhurst, we’ve identified 78 individuals who
have shareholdings in at least 40 UK companies,
and 40 individuals with shareholdings in over
50 UK companies. This includes the likes of
Matt Robinson, co-founder of GoCardless and
Nested who, according to research from Sifted,
invested in 50 companies in 2020. Similarly,
Songkick co-founder Ian Hogarth is reported to
Investors in focus
30
16.2 First-round fundraisings by fund type
have invested in 30 companies last year, whilst
Gumtree co-founder Michael Pennington backed
12 companies.1
Needless to say, these individuals are
completing far more than the average of
three deals a year (based on data from the UK
Business Angels Association (UKBAA)).2
And as their profiles and experience build, so
too do their relationships with funds. Chris
Mairs is a successful tech entrepreneur-turned-
angel investor, who has invested in around 120
companies since 2012 (including Beauhurst).
He tells us that “the longer you’ve been in this
ecosystem, the stronger your networks become,
and the more companies you get to see. My deal
flow has improved significantly as I’ve become
better known by the VCs.”
Reece Chowdhry, Founding Partner at RLC
Ventures, and occasional angel investor himself,
tells us that RLC has been building its own
network of angels across the UK, now numbering
30 to 50. He confirms our finding of a divergence
in the market. “We’ve seen two pools of people
in the pandemic. Those in the UHNW pool have
had a really strong appetite for co-investment
opportunities.”
“But some of the investors who might have put
in the occasional £10k to £20k ticket have said
‘sorry, I’m not investing for the next year or so’—
they just want to ride it out and see what’s what.”
Individual angels were reported to have
participated in 324 UK equity deals in 2020,
up from 272 in 2019, and narrowly improving
on the record 320 in 2017. It’s particularly
reassuring to see this upwards trend in a time
of crisis, given that angels have the ability to
stop investing completely, unlike VC firms which
are accountable to their LPs and committed to
deploying their capital.
And their appetite for risk is not only evident
in the number of ventures they’re putting
money behind, but the stage of venture, too.
Individual angels were the only investor type
with an increased number of first-time rounds
announced to the press, with 111 disclosed in
2020 versus 79 in 2019.
“Without angels, first-round fundraisings in 2020
would have been decimated,” says Roderick
Beer, Managing Director at UKBAA, noting that
even first-time rounds led by VC firms often
include angel participation.
In general, individual angels may not have had
as great a demand for “survival funding” as
other fund types. According to angel investor
and serial entrepreneur Sam Simpson, once a
company has progressed to using institutional
funding, it is likely to revisit their VC firm to
draw down more funds, rather than raise
another angel round. This would afford some
angels comparatively more time and resources
to consider first-time rounds in 2020 than, for
example, venture capital and private equity
firms.
But that’s certainly not been the case for every
angel. Having surveyed 265 angel investors
(predominantly UK-based) back in July, UKBAA
found that 50% had been negatively impacted
by the pandemic. The two most frequently
cited reasons for this “were that the economic
16.1 Number of deals by fund type
Business angels
Corporate
Crowdfunding
PE/VC
Angel networks
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
100
200
300
400
500
600
700
800
Business angels
Corporate
Crowdfunding
PE/VC
Angel networks
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
50
100
150
200
250
1. https://sifted.eu/articles/uk-angel-investors-2020/
2. https://ukbaa.org.uk/wp-content/uploads/2020/10/20201008-BBB-Business-Angels-Report-Final.pdf
uncertainty had affected the angel’s own
personal investment capacity and that they
concentrated on supporting and investing in
their portfolio businesses.” 3
Investing to the beat of the same drum
Whilst the pandemic has had differing impacts
on different angel groups, and indeed different
angels within those groups (especially as each
angel will have their own sectors of interest,
some of which will have been far worse affected
than others), the rhythm of investments through
2020 seems to have been similar across the
board.
“In lockdown one, everyone stopped spending
for a bit, took stock and wanted to see what
happened to the economy and which sectors
were impacted,” says Simpson, who has a
preference for SEIS rounds, and invests between
£10k and £50k. “I personally helped a couple of
businesses that were mid-raise and struggling
to close.”
“But by the middle of the year, everybody had
realised which sectors would be most negatively
impacted, and could focus their efforts away
from travel, tourism, hospitality—anything in
those areas, adjacent or reliant on them.”
He adds that, on the other side of the table, “a
lot of founders panicked at the beginning of the
pandemic and either brought forward a funding
round or just tried to close early. But things
seem to have settled back down to normal now.”
The picture was similar for Mairs: “When
lockdown first hit, people thought the economy
might completely tank and that that would have
a knock-on effect on venture funding. But that
didn’t happen, and partly because we could all
see how the stock markets remain remarkably
buoyant.”
Caroline Halliday, who predominantly invests
in EIS eligible cleantech rounds via Green Angel
Syndicate, also noted how “the original drop
in the stock markets and volatility in property
markets had everyone worried that their assets
would weaken, and it’s very tempting to pull
back from riskier asset classes in that instance.
But a robust stock market gave people the
confidence to make these more marginal, risky
investments”.
“The pandemic has created lots of opportunities”,
she adds, “Green Angel Syndicate has had
a much better year than forecasted and the
pipeline is still very strong.”
Harder, Better, Faster, Stronger
The switch to remote work also seemed to have
a consistent impact—and a positive one at that.
Simpson saw deals close faster than ever before.
“The use of Zoom has massively reduced latency.
I can have my first call today, read the pitch deck
tonight, do my due diligence and be back on
another call tomorrow.”
For Mairs, remote investing has been far
more successful than he first anticipated. “In
those early days, there was a worry that not
being about to meet face-to-face would make
investment decisions more challenging. But
actually, Zoom has worked very well and most
have adopted it very quickly.”
Mairs confirms that, despite not having any
in-person meetings since March, the last
ten months have been the busiest period in
his investment career. And his geographical
horizons have expanded massively through the
pandemic:
“I now don’t have to try and find a time and a
space where the founder and I can meet. You can
do things at shorter notice, you don’t have to be
geographically close and you don’t need to have
a location barrier at all: I can invest in someone
in Edinburgh, in Exeter or France—it no longer
makes a difference.”
And that interest in startups further afield will
have worked in the UK’s favour too. Foreign
super-angels now have easier access to the UK’s
innovative businesses and world-class talent.
Indeed, Chowdhry says that RLC Ventures has
seen increased appetite from US angels in
particular, with involvement in two deals in the
past year.
The switch to virtual has also allowed Green
Angel Syndicate to increase existing membership
engagement. According to Halliday, “a lot of
members were unable to travel in and out of
London for every pitch event pre-covid, but
virtual pitches are far easier to attend, so we’ve
seen audience sizes increase.”
And that’s not the only benefit of virtual
meetings, “some people may not have the
confidence to ask a question in a room of 80
people, but are comfortable speaking in front
of a large audience online. So it’s allowed for a
more participative-type forum, and of course the
more you understand a company, the more likely
you are to invest.”
On the other side of the coin, it’s become
more difficult to network with new people and
increase membership size. “Because people
aren’t going out to see friends and meet new
people, there’s less opportunity to say ‘have you
heard about this syndicate? Why don’t you come
along to the next meeting?’”.
A positive outlook
Though some angels may find that their capacity
to invest has been squeezed through the
recession, furlough, or forgone bonuses, it seems
that there is a strong consensus that the future
looks bright for startups and angels alike. As
Chowdhry puts it:
“History has shown that a lot of really great
opportunities present themselves in times of
economic uncertainty. We’ve already seen a high
volume of mission-driven, passionate founders
through the summer, and I expect to see a
huge wave of prominent startups coming out
of the pandemic. And the more long-term and
experienced investors will recognise this and
remain active through 2021—it’s certainly going
to be a busy year for us”.
3. https://ukbaa.org.uk/wp-content/uploads/2020/10/20201008-BBB-Business-Angels-Report-Final.pdf
32
Basket case valuations
Dan Robinson
The price of private companies may have
increased by as much as 50% during 2020.
The second half of 2020 saw a boom in public
markets, perhaps best represented by the
extraordinary valuations reached by tech
stocks such as Tesla and Zoom. Beauhurst data
suggests that a similar boom took place in the
UK’s private equity and venture capital market.
Analysis of a hypothetical basket of private UK
companies suggests that private company prices
have increased by nearly 50% during 2020.
This is likely due to a confluence of factors:
a record amount of investment into private
companies; a global trend towards larger fund
sizes; and the Bank of England’s changes to
monetary policy to cushion the impact of the
pandemic. Given the longevity of these factors,
it seems likely that 2021 will see a continued and
significant increase in the transaction-derived
valuations of private companies.
Measuring price changes over time
To analyse prices changes over time, the cost
of a group of nine ‘average’ companies was
calculated for the end of each calendar year
since 2011. The price of the companies was
based on the mean company valuation by stage
of evolution and sector over the calendar year,
based on equity fundraisings. Every year, the
basket of companies consisted of an average-
valued seed, venture and growth stage company
in the technology, business and professional
services, and industrial sectors. These sectors
were chosen because they represent 88% of
the total number of equity deals since 2011.
Beauhurst has deep data on companies that
have fundraised at the three growth stages
selected, helping to ensure accurate pricing of
the basket. This methodology—using a basket of
‘goods’—is also employed to calculate inflation.
The price of the basket of average companies
increased by 48% from £185m in 2019, to £274m
in 2020. A similar increase in price occurred
when the basket rose 60% from £115m in
2016, to £184m at the end of 2017. Potential
contributing factors are discussed under the
headings below.

Increased investment into the UK’s private
companies
There was significant investment of £9.8b into
the UK’s private companies in 2020, down
slightly from the high of 2019, when £11.7b was
invested via announced deals. Notwithstanding
the plateauing, or record number of deals in
2020 (depending on if you include the Future
Fund or not), the rough trend since 2017 has
been high annual investment via a declining
number of deals. Naturally, as more money
seeks fewer deals, valuations will rise.
Most of the price increase in the basket of
companies has been driven by those operating
in the business and professional services sector.
The average price of the companies in this sector
rose 68% to £102m. This is unusual, as one
might expect technology businesses—which
are more likely to have thrived under lockdown
conditions—to be more desirable investments
than business and professional services firms.
However, the technology sector firms only
increased in value by 34%—half as much as
those in the business and professional services
sector.
An explanation for this could be that companies
in the technology sector already trade at
significant premiums to other sectors and that
institutional investors are harder to push into
exuberance than retail stock buyers.
The forced change to remote working may also
go some way to explaining the increased value
of companies in the business and professional
services sector. While technology sector
companies are likely to already enjoy many of
Investors in focus
33
the benefits of a technology-enabled workforce,
companies in the business and professional
services may see significant improvements in
productivity enabled by the adoption of software
tools for remote working.
Larger fund sizes
The average fundraising for a fund has increased
every year from 2015. In 2015, the average fund
raised was £149m, while in 2020, the average
fund raised was £361m. The simple argument
here is one we’ve heard before; a rising tide lifts
all boats. More money for investments means
prices will rise. Another subtler aspect may be
that, as investors raise larger funds, it becomes
more challenging from an administrative and
psychological standpoint to write smaller
cheques. Even when investing in smaller
companies than usual, a fund manager or VC
may find it easier to agree to higher valuations
and cut familiar-sized cheques.
With an effect like this in place, valuations for
earlier rounds are shifted upwards, which then
drives up valuations at later stages.
In the accompanying chart, the global average
fund fundraising has been plotted alongside the
price of the basket of companies. Increases in
the size of the average fund raised by calendar
year match up with increases in the price of the
basket the following year.
This suggests that some of the increase in
private company prices in 2020 was probably
driven by investors’ successful fundraising efforts
in the 2018 and 2019 period, when the average
fund raised increased by 56% from £218m to
£339m.
Because fund managers have accepted a
mandate to invest their limited partners’ money
and derive their own income from doing so, it is
hard for them to hold back from investing, even
during a pandemic. So the large funds raised
over the last couple of years have likely been
deployed throughout 2020 but into a smaller
number of companies that are ‘promising’
in pandemic conditions, again driving up
valuations.
Changes to monetary policy
The base rate chart shows the price of the nine
hypothetical companies from 2011 to 2020,
overlaid with the Bank of England’s official base
rate. This rate impacts how much it costs to
borrow money. When rates are low, investors
pursue riskier asset classes (such as venture
capital) to achieve returns. With more money
flooding into private equity assets, prices start to
rise. As can be seen, rate cuts in 2016 to curb the
impact of the Brexit vote, and in 2020 to cushion
the impact of coronavirus, line up with price
increases in the basket of companies.
The other part of the story is quantitative easing.
Because base rates have been low since the
financial crisis of 2008, there was only so much
lower that the Bank of England could go, and
this alone was not guaranteed to provide the
necessary economic stimulus. So, the Bank of
England created more money. To do this, it buys
billions of pounds of government bonds, which
gives investors cash which can then be invested
17.1 Average global fund raised and basket of companies price
£274m
£115m
£102m
£88m
£182m
£184m
£185m
£75m
£72m
£70m
£193m
£218m
£221m
£179m
£159m
£149m
£145m
£339m
£281m
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£361m
Average fund raised (global) (Preqin)1
Price of basket of mean valuation companies (Beauhurst)
17.2 Bank of England base rate and basket of companies price
£70m
£75m £72m
£88m
£102m
£184m
£182m
£185m
£274m
0.10
0.50
0.50
0.75
0.25
0.25
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
£115m
Bank of England base rate (Bank of England)2
Price of basket of mean valuation companies (Beauhurst)
“Beauhurst data shows that equity
in the UK’s private companies saw a
significant price increase in 2020 and
suggests we will see further increases
throughout 2021.”
34
into other financial assets, boosting the value of
assets overall. Quantitative easing also fits with
the increases in the price of private equity assets.
The bond purchase chart shows cumulative
Bank of England bond purchases against the
basket of companies. Where no purchases occur,
and the rates are stable or increase, the price of
the basket remains relatively steady. This was
the case in 2018 and 2019. Where cuts in the
base rate coincide with bond purchases, the
impact on the basket is more extreme, as was
the case after the Brexit referendum and during
2020. Given the scale of the Bank of England’s
interventions in the face of the pandemic,
a continued dramatic increase in the prices of
private companies seems likely throughout 2021.
What next?
Beauhurst data shows that equity in the UK’s
private companies saw a significant price
increase in 2020 and suggests we will see further
increases throughout 2021. Many aspects of
the increase are likely rational and related to
increased risk-seeking, in pursuit of higher yield
in a low-yield environment. Though, as 2020 has
shown, irrational exuberance can take hold of
investors under any conditions.
17.3 Bank of England bond purchases and basket of companies price
£895b
£745b
£645b
£375b
£445b
£200b
£70m
£75m
£72m
£88m
£102m
£115m
£184m
£182m
£185m
£274m
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Bank of England bond purchases (Bank of England)3
Price of basket of mean valuation companies (Beauhurst)
1. https://www.preqin.com/insights/research/blogs/private-equity-aum-will-top-9tn-in-2025
2. https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
3. https://www.bankofengland.co.uk/monetary-policy/quantitative-easing
£
35
About Beauhurst
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