Equity investment in the UK 2019
The Deal
From the CEO
2019 in review
Warning signs at the seed stage
The year in data
It's bleak for female founders
The biggest deals of the year
sectors in focus
2019: the year of sustainability?
AI continues to storm ahead
investors in focus
Top investors
Crowdfunding in 2019
Overseas investors get sterling deals
About beAuhurst
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4
8
14
16
22
26
30
32
36
40
notes:
To be included in our analysis, any investment must be:
•
Publicly announced between 1 January - 31 December 2019
•
Some form of equity investment
•
Secured by a non-listed UK company
A chAnging lAndscApe
The equity market has matured considerably since
we first started tracking its progress back in 2011.
Just £1.6b was invested in the UK’s high-growth
companies in that first year, a figure that was
surpassed just 49 days into 2019. Individual deal
sizes have grown massively, and with OneWeb’s
£941m raise back in March it’s only a matter of time
before we see billions of pounds’ worth of equity
deployed in a single transaction. In total, 2019 saw
£12b deployed across the country – an astonishing
close to the decade.

A decAde of innovAtion
Fuelled by this significant increase in capital,
ambitious UK companies have made great
technological advancements. The 2010s have seen
the exponential growth of fintech and artificial
intelligence companies, with many other niche areas
coming to the fore. We’re now witnessing the start
of a seismic shift towards more environmentally
conscious innovations, including clean energy and
electric vehicles, as well as a near continual stream
of new words added to the startup lexicon, including
femtech and agetech among many others. Our data
team is working to illustrate these new areas of
operation with an extended list of buzzwords and
a shiny new sector matrix to better accommodate
them, due to be implemented on Beauhurst this year.

our position on the globAl stAge
We take our first steps into the new decade with
some clarity over our position on the global stage,
but our ceremonial departure from the European
Union is just that—the embarkation of an extended
and unresolved transition process. Over the course of
the past year, foreign investors have taken particular
advantage of the fluctuating price of the pound
and shown increased appetite for UK business,
completing more deals and investing more capital
into the country than ever before. We’re confident
that the wealth of talent and ambition that is so
plainly evident across the country means the UK will
remain an attractive place to do business, however
the precise details of trade negotiations transpire.
A rocky roAd AheAd?
Perhaps more worrying is the status of government
support systems in place for entrepreneurs, young
companies and investors. Some fantastic initiatives
have been put in place over the past few decades,
including Entrepreneurs’ relief, Innovator visas, R&D
tax credits and EIS/SEIS. These have helped build
and maintain the UK’s position as one of the world’s
leading startup cultures. But many of these schemes
are seen as easy targets for revenue raising or
simplification, and may now hang in the balance as
we await the first budget of the new government.
We would be first to argue that some reforms are
required, particularly to close the loopholes in
Entrepreneurs’ Relief that have allowed thousands
to benefit without taking real entrepreneurial risk.
But we also encourage the government to carefully
consider the positive impact that these schemes
have on the ecosystem, and seek to reform, protect
and expand these initiatives wherever possible.
Change could not come at a more critical time, as
investment into the UK’s earliest-stage startups
continues to lose momentum. The growing risk
averse sentiment amongst both investors and
entrepreneurs will spell trouble for us in the coming
years, as the pipeline of future growth-stage
companies is diminished.

Despite these words of warning, we hope that this
report effectively shines a spotlight on the strength
of the UK’s high-growth economy. As always, I’d
like to thank those who have contributed their time
and expertise to this report, and hope that you
enjoy reading it as much as we’ve enjoyed putting it
together. Have any questions or comments? Get in
touch using the details below.
toby Austin
ceo And co-founder
info@beauhurst.com
 @Beauhurst
 company/beauhurst
 beauhurst
A word from our CEO
2019 in
review
A record breaking £12b worth of equity was invested
during 2019, but the number of deals completed
continues to decline. For the second year in a row,
early-stage companies have been hit the hardest.
4 In Reviewrecord investment, fewer deAls
£12b was deployed through the year, but the
number of deals completed has continued to
decline since 2017.
foreign investment skyrocketed
As the pound fluctuated, investors from abroad
showed more interest in British companies than
ever before, participating in 27% of deals.
Another top yeAr for fintech And Ai
Fintech and AI continue to demand attention, with
deal numbers increasing 11% and 5% respectively
since 2018.
crowdfunding strides on
It was another great year for crowdfunding
platforms, and Seedrs is crowned the most active
UK investor of 2019.
london seizes A growing shAre
As usual, the Capital saw a significant share of deals,
and an astonishing 73% of pounds invested in 2019
were pumped into London-based businesses.
A bleAk yeAr for gender diversity
The proportion of investment awarded to female-
founded business stagnates at around 20% for the
fourth year in a row.
5 In Review2019 was a mixed year for equity investment into
the UK’s high-growth companies. There were 1,751
investments made, ranging from first-time, friends
and family rounds, to a near £1b round into OneWeb.
1,751 is a large number of deals—over 3x the number
seen in 2011—but represents a fall from the all-time
high of 1,818 deals in 2017. With the macroeconomic
uncertainty that abounded in 2019, it was
tempting to see this dip as the beginning of a more
pronounced cooling off. But we’ve seen more money
flowing to these companies than ever before: £12b
was invested through those 1,751 deals. It doesn’t
take advanced mathematical skills to see that the
average deal size has continued to climb—driven
particularly by megadeals, like that OneWeb outlier.
This is natural and what we should expect to see
at this stage in the cycle. The companies that were
raising their seed rounds seven or eight years ago are
now raising their growth rounds. More interestingly,
investors who were participating in seed rounds
seven or eight years ago are now participating in
those growth rounds too – and this might be causing
a problem for first-time raisers. I’ll come back to this
problem. Deal sizes that were previously impossible
– or at least not possible without going to the public
markets – are now commonplace.
Megadeals have become commonplace because
there is more capital chasing private company
investments than ever before. With new, large funds
still coming to market – such as Skymind Global
Ventures’ $800m fund and Felix Capital’s $300m
fund – the amount of dry powder in the ecosystem is
only set to increase. Over the course of 2019, bigger
funds have been chasing the same later-stage deals,
driving up valuations to create new unicorns. Snyk’s
investment round last month took the UK’s unicorn
count to 22 – an exciting herd that we explore in
depth in our Unicorn Report.
When we launched our Unicorn Report last month at
Smith & Williamson, one of the statistics that stood
out most starkly was the fact that of the 42 founders
at the 22 unicorns, only one is female. The lack of
gender diversity in the UK’s high-growth companies’
founding teams is something we care deeply
about. For this reason we worked with Newable to
produce our state of the nation report on female
entrepreneurship in the UK. Only 25% of the UK’s
high-growth companies have at least one female
founder but, even worse, in 2019 only 9% of pounds
invested went to those companies. We see better
statistics for the early-stage companies that are
being supported by accelerators: 38% of accelerated
businesses have a female founder. This suggests
there is a pipeline of companies that may be about to
change the narrative – if they can get funding.
Warning signs at the seed stage
2019 in review
6 In ReviewAlthough there is more money being invested in
private companies than ever before, it’s getting
harder to raise at the seed-stage. The number of
seed deals fell for the second year in a row from
739 in 2018 to 689 last year. Even the amount
being invested at the seed-stage fell slightly. Why
this might be is a complex question of supply and
demand. Are there fewer seed-stage startups?
Are companies boot-strapping for longer? Are
accelerators replacing the need for the earliest
investment rounds? Are the earliest-stage companies
raising fewer but bigger rounds? Are investors
following their portfolio and being drawn away from
the seed stage to later rounds?
Last summer we hosted an event with NatWest
called ‘Seeds of Doubt’ to try to answer these
questions. Two themes emerged from the discussion:
firstly there was an awareness of entrepreneurs
accessing alternative forms of finance. As types
of debt funding available to riskier businesses
have proliferated, their use by entrepreneurs has
increased. Secondly, VCs in the room were aware
that they and their colleagues had drifted away
from investing in the earliest stage companies. It is
impossible, for now at least, to say whether they’ll
return to those companies as the macroeconomic
picture improves (or at least becomes clearer) or
if they are just following the development and
requirements of their existing portfolio.
The potentially 12 billion dollar question is: what’s
going to happen in 2020? We’re confident that we’ll
continue to see a huge amount of money invested
into the UK’s high-growth companies. But will deal
numbers fall further? We think they will, and that it
will take some brave VCs making more and riskier
investments to ensure that it is not a steep fall.
Deal sizes that
were previously
impossible—
or at least not
possible without
going to the
public markets—
are now
commonplace.
“
Henry Whorwood
7 In Review
8 In Review8 In ReviewA total of £12b was deployed over the course of 2019, eclipsing the previous record of £9.1b set in 2017,
and a 58% increase from 2018. For the second year in a row, the number of deals completed has slightly
declined, settling at 1,751 at the end of the year.
1751
equity investment deals
£12.0b
invested into UK companies
£6.8m
average investment size
Investment activity in 2019
- 2%
+ 58%
+ 61%
A record yeAr for investment
how did 2019 compAre with 2018?
2011
2012
2013
2014
2015
2016
2017
2018
2019
£12.0b
£2.1b
£2.0b
£3.7b
£1.6b
£4.4b
£9.1b
£7.6b
£4.4b
512
774
1035
1437
1605
1586
1818
1789
1751
Q1
Q2
Q3
Q4
£3.4b
£3.4b
£2.9b
£2.3b
460
475
409
407
9 In Review9 In ReviewInvestment stages
the seed stAge tAkes A dive
The number of deals fell 7% at the seed stage of evolution and increased 11% at the growth stage. This
represents a maturation of the market. The amount raised at the growth stage of evolution has grown
massively since 2018, from £3.9b to £7.6b.
the trend for lArger deAl sizes continues
£50m+
£10-50m
£5-10m
£2-5m
£1-2m
£500k-1m
<£499k
AMOUNT INVESTED
NUMBER OF DEALS
Seed
Venture
Growth
Established
2011
2012
2013
2014
2015
2016
2017
2018
2011 2012 2013 2014 2015 2016 2017 2018 2019
0
£1b
£2b
£3b
£4b
£5b
£6b
£7b
0
100
200
300
400
500
600
700
2011 2012 2013 2014 2015 2016 2017 2018 2019
2019
10 In Review10 In ReviewGeography
number of deAls per region 2011-2019
Most regions saw a decline or plateau in deal numbers between 2018 and 2019, including London. Still, the
Capital attracted a staggering £8.7b over the course of the year. The South West was the only region to secure a
record investment amount and number of deals, with £366m deployed over 88 deals.
LONDON
EAST OF ENGLAND
SOUTH EAST
YORKSHIRE AND HUMBERSIDE
EAST MIDLANDS
WALES
SCOTLAND
SOUTH WEST
NORTHERN IRELAND
WEST MIDLANDS
NORTH WEST
NORTH EAST
32
69
157
882
62
180
24
58
124
15
41
76
17
3
26
26
88
44
214
47
119
27
63
62
26
34
99
59
849
48
106
170
156
72
43
11 In Review11 In ReviewGeography
deAl numbers And Amount invested, selected cities
London-based companies saw 48% of all UK equity deals in 2019, and a massive 73% of all pounds invested.
Edinburgh was the next most popular city, with 79 deals worth a combined £143m. Meanwhile, the Cambridge
tech cluster secured the highest value of investment outside of the capital, with 66 deals worth £621m.
Newcastle
£15.9m
15 deals
Glasgow
£17.7m
31 deals
Edinburgh
£143m
79 deals
London
£8.7b
849 deals
Belfast
£20.7m
16 deals
Leeds
£61m
38 deals
Manchester
£315m
63 deals
Birmingham
£29.7m
16 deals
Cambridge
£621m
66 deals
Oxford
£311m
50 deals
Bristol
£302m
29 deals
Cardiff
£31.1m
28 deals
12 In Review12 In ReviewSectors and verticals
ArtificiAl intelligence deAl Amounts over time
Fintech and AI companies continue to dominate, with both sectors securing a record number of equity deals in
2019 – 191 and 157 respectively – and together attracting 20% of all deals. Deal numbers dropped significantly
for edtech (35%) and life sciences companies (21%), whilst blockchain and adtech saw deal numbers plateau.
deAls in selected verticAls over time
2011
2012
2013
2014
2015
2016
2017
2018
2019
£295m
£6m
£16m
£25m
£94m
£135m
£528m
£828m
£1,229m
2011
2012
2013
2014
2015
2016
2017
2018
2019
0
50
100
150
200
Life sciences
Artificial intelligence
Edtech
Blockchain
Fintech
Adtech
13 In Review13 In ReviewdeAls by investor type over time
Investors and valuations
PE and VC firms, crowdfunding platforms and corporate funds all made a greater number of deals in 2019
than any year prior. PE and VC funds continue to show the highest level of activity of all investor types.
Angel Networks have seen a 26% reduction in activity since 2017.
AverAge pre-money vAluAtions over time
2011
2012
2013
2014
2015
2016
2017
2018
2019
0
200
400
600
100
300
500
700
PE/VC
Crowdfunding
Angel network
Corporate
2011
2012
2013
2014
2015
2016
2017
2018
2019
£9.2m
£9.1m
£6.0m
£7.6m
£9.2m
£11.7m
£19.9m
£20.9m
£20.1m
percent of number of deAls
percent of Amount rAised
2011
2012
2013
2014
2015
2016
2017
2018
2019
95%
91%
87%
90%
86%
85%
89%
88%
91%
10%
13%
12%
10%
10%
89%
83%
81%
82%
81%
79%
79%
80%
80%
10%
13%
11%
13%
15%
15%
14%
14%
2011
2012
2013
2014
2015
2016
2017
2018
2019
All male
Mixed team
All female
15 In ReviewLast year, we published our first extended report on
the state of gender diversity across the UK’s high-
growth ecosystem, in collaboration with our friends
at Newable. The findings were both shocking and
tentatively encouraging; despite the proliferating
number of dedicated support systems for female
founders, the gender funding gap is still fairly stark.
Between 2011 and 2016, the proportion of equity
deals secured by companies with at least one female
founder grew from 11% to 21%, but there has been
no improvement since then. The figure settled on
20% at the end of 2019, still far from the 25% of high-
growth companies with a female founder.
In terms of the proportion of pounds received by
female-founded companies, the picture is even more
bleak. In 2019, just 9% of pounds invested went to
companies with at least one female founder, the
lowest level since 2012.
Within this, all-female founding teams received just
1% of all equity invested over the course of the year.
The raw numbers show that the amount of funding
secured by all-female founding teams in 2019 only
just surpassed the record amount raised in 2016
(£132.2m and £131.9m, respectively). When we
contextualise this with the increasingly high value
deals secured by later-stage companies—which are
more likely to be all-male founded—it seems clear
that this inequality will persist in the coming years.
Many key players across the industry, from large
corporates like JP Morgan and CMS, to investors
such as British Business Bank and Crowdcube, are
working hard to redress this imbalance and better
support female founders from the very outset. We’ve
shone a spotlight on some of these initiatives, as well
as insights from some of the UK’s most successful
female-founders in the full report.
It's bleak for female founders
2019 in review
number of deAls And Amount rAised
2011
2012
2013
2014
2015
2016
2017
2018
2019
0
£200m
£400m
£600m
£800m
£1000m
0
50
100
150
200
250
Mixed team
All female
Amount invested
Number of deals
Note: Eagle-eyed readers
may notice that the figures
stated here don’t quite match
up with those quoted in the
Female Entrepreneurs report.
This is because The Deal does
not include unannounced
fundraisings. The discrepancy
between numbers indicates
that companies with a female
founder are less likely to
announce a fundraising to the
media, which is likely related
to the fact that female-founded
businesses tend to be in earlier
stages of development than
those that are all-male founded.
16 In Review2019 saw a record number of megadeals completed
(investments worth over £50m), with 35 announced
over the course of the year, marking a 30% increase
from 2018. The largest deal of the year saw £941m
funelled into network provider OneWeb, which
relocated from the US in 2017. Greensill, which
provides working capital finance for supply chain
companies across the world, achieved the second
and third largest deals of the year worth a combined
£1.13b. This equity was deployed by Japan’s
SoftBank Vision Fund, which also participated in
OakNorth Bank’s £340m fundraising in February.
As is consistent with the previous two years,
companies based in London accounted for around
two-thirds of these megadeals. London is a favourite
destination among global investors, which are more
likely to participate in large, late-stage deals; 80%
of megadeals in 2019 involved participation from
a one or more foreign investors. The capital is also
well represented by the UK’s fintechs and challenger
banks, which secured 15 deals worth over £50m over
the course of the last year.
The biggest deals of the year
2019 in review
deAls over £50m in 2019
1 Jan 1 Feb 1 Mar
1 Apr
1 May 1 Jun
1 Jul
1 Aug
1 Sep 1 Oct
1 Nov 1 Dec
£100m
£200m
£300m
£400m
£500m
£600m
£700m
£800m
£900m
Seed
Venture
Growth
Established
17 In Review2019 £50m+ deAls
by regions
West
Midlands
1
South West
1
South East
4
Scotland
1
North West
2
North East
1
London
22
East of England
3
Software
1
Robotics
1
Property
development
1
Outsourcing
1
Hospitality
1
Life sciences
3
Energy
2
Food delivery
1
eHealth
1
Education
1
e-commerce
1
Digital security
2
Telecoms
4
Fintech
10
Challenger bank
5
2019 £50m+ deAls
by sector
18 In ReviewTransferWise
deAl dAte
13 May 2019
investors
Softbank Vision Fund
totAl rAised to dAte
£1.31b over three rounds
The Hut Group
Atom
deAl dAte
28 October 2019

investors
Softbank Vision Fund
totAl rAised to dAte
£1.31b over three rounds
deAl dAte
18 March 2019
investors
Qualcomm Ventures, Government of
the Republic of Rwanda, Grupo Salinas,
SoftBank Group, undisclosed investors
totAl rAised to dAte
£941m over one round
deAl dAte
2 August 2019
investors
Kinnevik, Munich Re’s Ergo Fund, Public
Investment Fund (PIF), Vostok New
Ventures, undisclosed investors
totAl rAised to dAte
£518m over three rounds
*Our records date from
OneWeb's relocation to
the UK in 2017.
£941m ($1.24b)
£615m ($800m)
£454m ($550m)
£511m ($655m)
19 In ReviewAtom
Secret Escapes
Atom
Atom
deAl dAte
17 May 2019
investors
Amazon, Fidelity Management &
Research Company, Greenoaks Capital
Management, T. Rowe Price
totAl rAised to dAte
£1.15b over nine rounds
deAl dAte
8 February 2019
investors
Clermont Group, Softbank Vision Fund
totAl rAised to dAte
£637m over four rounds
deAl dAte
7 June 2019
investors
TA Associates, Warburg Pincus,
undisclosed investors
totAl rAised to dAte
£346m over two rounds
deAl dAte
14 February 2019
investors
Mitsubishi Corporation
totAl rAised to dAte
£249m over four rounds
*This investment has
been paused while it is
under investigation by
the CMA.
£449m ($575m)
£340m ($440m)
£213m
£200m
Sectors
in focus
2019 was another stellar year for investment
into fintech and artificial intelligence
companies. We’re also seeing a shift towards
more environmentally conscious investments,
and the rise of sustainable startups.
22 Sectors2019: the year of sustainability?
sectors in focus
2019 began with a stark warning from Sir David
Attenborough “We are facing ... our greatest threat
in thousands of years”. This caution rang out to
the backdrop of sustained global protests from
Extinction Rebellion and the pervasive rallying cries
of environmental activist Greta Thunberg, which only
got louder throughout the year.
But it wasn’t just at the grassroots level that people
took notice, large conglomerates joined in on the
action to, such as Microsoft’s resolution to become
carbon negative by 2030 and Amazon’s pledge to
be carbon neutral by 2040. Businesses are now
showcasing the need to adapt in order to meet ever-
increasing concerns about a climate emergency. This
strengthened focus upon safeguarding the planet for
future generations has collided with the emergence
of disruptive companies in the UK, with ventures
spanning across clean energy, ethical decision-
making and waste reduction.
rAising funds & AwAreness:
empowering consumers
Alongside pressure on established corporations to
adopt sustainable goals, 2019 ushered a number
of significant investments into UK companies
seeking to alter the status quo by offering more eco-
conscious options to consumers.
23 SectorsAppearing on SyndicateRoom’s ‘Top 100 - Britain’s
Fastest Growing Businesses’ for two consecutive
years and raising £5m in August 2019, Farmdrop
promotes a more sustainable weekly-shop by
enabling consumers to order fresh produce directly
from farmers via their site. Olio has designed an
app to encourage the sharing-economy through
listings of unwanted food and household items for
collection by locals. With a mission to empower
communities to reduce waste, Olio raised $6m in
2018 from backers including Octopus Ventures and
Silvergate investments, followed by an unannounced
investment of £7.5m in November 2019.
Founded by former investment managers Matthew
Latham and Tom McGillycuddy, tickr has brought
impact investing to the masses. The team has
developed a mobile app that allows users to invest
in companies that have a positive impact on people
and the planet, with portfolios focusing on issues
such as climate change and equality. Having raised
£1.14m through crowdfunding platform Seedrs in
June 2019, tickr is set to expand its team, develop its
product, and acquire new users.
With 2019 seeing both institutional investors and
the ‘crowd’ pumping significant injections of capital
into companies promoting ethical choices, tools
facilitating more conscious consumer decision-
making look set to become more mainstream as
options continue to diversify.
cleAning up energy
Challenger energy supplier, OVO Energy, which
is on a self-proclaimed “journey to zero carbon”,
raised a staggering £200m investment from
Mitsubishi Corporation in February. This led OVO
to the much sought-after unicorn status, with the
goals of expanding into new markets in Europe and
Asia, as well as developing ‘Kaluza’, its intelligent
technologies unit. Renewable energy provider Bulb
is also well funded, to date having secured £65m
to OVO’s £259m. The majority of this total came
in one £60m round from Digital Sky Technologies
and Magnetar, with the aim of hiring more top class
engineers and energy experts. As the likes of these
disruptive organisations stay hot on established
providers’ heels, taking a technology focused
approach while winning customers concerned about
an energy crisis, the current climate seems well set
for innovations and developments in the sector.
mAteriAl chAnges
The backlash against waste being sent to landfill
(plastic in particular) gained even more traction
this year. This issue is being addressed by a number
of ambitious companies across the UK that are
working with sustainable materials with all sorts of
applications. NOTPLA, an Imperial College spin-
out, has developed an edible water bottle made
from seaweed, while Middlesbrough-based Presca
Teamwear (which raised £400k in May 2019) reuses
plastic bottles to create sportswear. In July 2019,
Maven Capital’s NPIF Equity Finance participated in
a £1.27m investment into TRAKRAP, a Lancashire-
based sustainable packaging manufacturer, for the
purpose of creating 67 new jobs. Meanwhile, Worn
Again is attempting to combat fast-fashion habits
by utilising waste textiles to create new clothes,
completing a £5m round with participation from
Jo Hawkins
As consumer
interest in eco-
friendly products
continues to
grow, so does
the support
system behind
the companies.
“
24 SectorsH&M CO:LAB. With such a vast spread of support
from the likes of universities, corporate investments
and traditional private equity and venture capital
backers into a varied cohort of companies, the battle
against single-use materials is being tackled from a
multitude of angles.
An eco-friendly ecosystem?
As consumer interest in eco-friendly products
and services continues to grow, so do the support
systems behind the companies; there are a growing
number of social impact funds and accelerator
programmes specifically designed to support
sustainable business ventures.
The University of Edinburgh-based ‘Climate-KIC’
accelerator provides a three-stage programme for
low-carbon entrepreneurs and start-ups. Graduates
include H2GO Power, a University of Cambridge spin-
out that develops hydrogen-storage technology with
a range of applications including portable energy
sources for electric vehicles and smartphones.
‘The Future 20’ accelerator, managed by the
Future Business Centre, assists companies that
aim to address global and local challenges
through technology, specifying as one of its entry
requirements that companies must be “addressing
at least one of the UN Sustainable Development
Goals with their business model”. Notable attendees
include BEEN London, an online store selling items
made from upcycled materials that would otherwise
go to landfill, and Twipes which manufactures an
environmentally-friendly toilet paper that breaks
down within 3 hours.
It’s not just accelerators pulling their weight; there
really is activity at every stage of the ecosystem.
Work is being carried out at universities across
the UK to support spin-outs and commercialise
cutting-edge research, and large corporates are
embracing the intrapreneurial spirit to foster
sustainable initiatives. And that’s not to mention
the existence of active social impact VCs across
the UK, with the likes of ClearlySo, Nesta Impact
Investing and LGT Venture Philanthropy investing
into socially and environmentally conscious
companies. It’s encouraging to see such provision of
support growing for companies with commendable
visions, and this is a trend we expect to see continue
throughout 2020 and beyond.
Though critics have been quick to judge a number
of startups for a ‘growth-at-all-costs’ mindset,
2019’s activities in the realms of sustainability
should be cause for hope, showing a diverse range
of companies and supporters seeking sustainable
business models both in terms of longevity for
themselves, and for our planet.
25 In Review
26 SectorsAi investment brAckets
2016
2017
2018
2019
£50m+
£10-50m
£5-10m
£2-5m
£1-2m
£500k-1m
<£499k
most common crossover
sectors for Ai 2019
by number of
deAls
Robotics
6
Medical
technology
5
PropTech
7
Media
9
Life sciences
6
Subscription
15
Leisure and
Entertainment
6
FinTech
17
eHealth
5
Digital security
6
Internet of Things
13
CollabTech
5
Clean
technology
5
Chatbots
8
Blockchain
11
Big data
22
27 Sectors2019 saw yet another year of continued growth for
businesses in the AI sector. While deal numbers
increased by a fairly respectable 5%, it was
the amount invested that skyrocketed in 2019.
Growing by 57% from 2018, £1.3b went into
artificial intelligence businesses — 11% of the total
invested into all businesses during 2019. Mirroring
movements across the broader market, this
significant jump can be attributed to an increase in
larger deals at later stages.
In 2016, deals worth under £500k accounted for
almost 50% of investments into artifical intelligence
companies. As the market has matured, these deals
now account for just over 20%. Further powering
this growth is the fact that a significant number of
businesses across some of the UK's most exciting
sectors are powered by artificial intelligence. In 2019,
22 investments went into businesses operating in
both the AI and big data space, and 17 to those in the
FinTech and AI space.
AI continues to storm ahead
sectors in focus
Ai deAls And investment 2011 – 2019
2011
2012
2013
2014
2015
2016
2017
2018
2019
£1.30b
£828m
£528m
£295m
£135m
£94m
£25m
£16m
£6m
74
45
6
157
133
137
150
26
16
Investors
in focus
Growth in crowfunding platforms continues, with a
record number of deals during the year. Elsewhere,
two new entrants make it onto the ranking of the
UK's top ten most active investors.
30 Investors Top investors by UK deal numbers
investors in focus
SEEDRS
CROWDCUBE
SCOTTISH
ENTERPRISE
MERCIA
TECHNOLOGIES
DEVELOPMENT
BANK OF WALES
124
58
50
215
191
See
d
Gro
wth
Ven
ture
Esta
blis
hed
31 InvestorsmAintAining the stAtus quo
Overall, the face of the UK’s most active investors has
shown limited change in the past few years, with just
two new entrants since 2018: angel syndicate Equity
Gap and VC firm Par Equity have entered the top ten,
knocking SyndicateRoom and Foresight Group out of
the rankings.
Seedrs takes the crown as the UK’s most active
investor, having facilitated 215 investments
throughout the year. Coming in a close second in
the overall rankings, Crowdcube participated in
the highest number of seed-stage deals in 2019. It
comes as no surprise that these two crowdfunding
platforms top our charts – as they do so year after
year – and we expect their dominance to persist for
the foreseeable future. Whilst total UK deal numbers
dropped between 2018 and 2019, both Seedrs and
Crowdcube saw deal activity rise by 36% and 14%,
respectively. Clearly, the crowd is showing great
appetite for a chunk of the UK’s fastest-growing
businesses, and entrepreneurs want them on board.
growth in the regions
Scottish Enterprise has also seen a significant
increase in deal activity, with a 32% jump in the
number of deals completed between 2018 and 2019.
The regional body has now ranked as the third most
active investor in the UK for three consecutive years,
whilst Development Bank of Wales has dropped
from fourth place in 2018 to fifth place behind Mercia
Technologies. Whilst the capital’s behemoth high-
growth ecosystem continues to demand investor
attention, these regional bodies are ensuring that
further-flung areas of the country are just as viable
places to set up and grow new businesses.
BGF
MAVEN CAPITAL
PARKWALK
ADVISORS
EQUITY GAP
PAR EQUITY
38
32
26
26
25

32 InvestorsThe crowd of crowdfunded companies is growing
larger and larger as investment platforms continue
to back more deals every year. Primarily funding
seed and venture stage businesses, crowdfunding
platforms are an important supporter of companies
at the earliest and most precarious stages of
growth. 2019 reflects the busiest year on record for
these platforms, with 424 deals by UK companies
involving crowdfunding platforms. The past decade
has been the stage for their debut into world of
equity investment, so we’ve asked three experts in
crowdfunding what lies ahead for these investors.
who Are the big plAyers?
Equity crowdfunding platforms allow capital (from
chunks as small as £10) to be exchanged for stakes
in companies looking to raise funds, taking on
the challenges of organising and administrating
thousands of investors within a single round.
Crowdcube and Seedrs are the top two equity
crowdfunding platforms in the UK. Crowdcube
facilitated its first investments into startup
companies in 2011, making seven investments
totalling £1.6m. Seedrs made their crowdfunding
debut in 2012, facilitating seven fundraisings worth
£248k. They are now involved in hundreds of deals
every year, both in the UK and abroad.
SyndicateRoom positioned itself as an equity
crowdfunding platform that allowed amateur
investors to co-invest alongside professional
investors from 2013 to 2019, during which they
helped raise over £250m. In 2019, pre-empting
market changes they moved towards an index-
informed portfolio approach. Through this move,
they plan to give investors access to the top-end
of the startup market, and not just those that use
traditional crowdfunding platforms.
Crowdfunding in 2019
investors in focus
33 Investorscrowdcube
£125.3m
191 deals
seedrs
£99.3m
215 deals
mAjor crowdfunding plAtforms, 2019
Amount invested
Number of deals
Pre-emption, fund campaign, partnership
crowdfunding deAls over time, All plAtforms
Q1 2018
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
95
83
82
106
89
102
92
141
gAps in funding And diversity
The UK’s entrepreneurial scene is the most active in
Europe, with a well developed innovation ecosystem
that attracts a significant amount of foreign
and domestic investment. Roberto Napolitano,
Marketing Director at Seedrs, notes that the UK's
tax relief incentives, such as EIS and SEIS, make
the country a relatively hospitable place to invest
in young companies, compared to other countries.
“The government has thus far been very supportive
of funding ambitious startups”, he adds, “we're
renowned for fostering an innovative and supportive
environment for entrepreneurs, so we’d like to see
that continue.”
Marcin Zaba, Head of Marketing at SyndicateRoom
reiterated that “there is a good amount already
available for the really young startups. Funding
is encouraged by tax relief schemes and support
networks are well developed and relatively open.”
He identifies the key issue of the funding gap for
companies looking for their next round of £1m –
£5m. Crowdfunding platforms and angel investors
rarely handle deals of these sizes alone, and
institutional investors are moving progressively
to even later-stage, larger deals. This shift has the
potential to leave some companies stranded in the
venture gap.
Crowdfunding platforms have supported very large
deals in the past, such as Monzo’s £20m through
Crowdcube. However, these deals often involve
institutional co-investors to reach these numbers.
Marcin argues that these deals are only an option
for particular types of companies i.e. those with
a strongly-branded consumer product, such as
challenger banks or brewing companies. Companies
that can capture the imagination of thousands of
crowdfunders may be able to raise millions through
these platforms, but others may struggle.
While SyndicateRoom has supported life sciences
and medtech companies, Marcin finds it “difficult
to see a crowdfunding community with enough
individual crowdfunders to support these kinds of
businesses in their medium-sized rounds.” Therefore,
the ecosystem needs other kinds of investors to
realign their activities with the needs of the market
and fill this gap at the venture stage.
While later stage companies are needing more
attention, the support provided to the earliest stage
organisations remains poorly distributed. Luke Lang,
Co-founder and CMO of Crowdcube, argues that
regional and gender-based inequalities are the key
challenges for young UK companies. “Although there
are a wealth of co-working spaces, accelerators and
incubators in London, this abundant ecosystem is
yet to be replicated across the regions.”
Looking at the findings in Beauhurst’s Female
Entrepreneurs report, crowdfunding came out top
as the most equitable type of investor in the UK.
However, to redress the gender imbalance, it’s clear
that “much more needs to be done” to support
female entrepreneurs seeking finance.
strong numbers, in the right plAce?
With nine years of rapid growth behind them and
an unprecedented amount of investment activity in
2019, crowdfunding platforms are looking stronger
than ever. Continuing this growth will be one test
faced by crowdfunding platforms in upcoming years.
“With 35,000 active investors already claiming SEIS/
EIS in the UK, I’m not sure there are many more
individuals who are willing to pick and choose their
own startup investments. However, we believe that
there’s a much larger group of underserved passive
investors” argues Marcin. Luke also recognises this
challenge, but says it’s one that Crowdcube are
relishing. “I expect to see more overseas businesses
raising with us, especially in the EU where new rules
are changing to reflect what we have in the UK.”
34 Investorsour experts
Roberto Napolitano
Marketing Director
Seedrs
Luke Lang
Co-founder & CMO
Crowdcube
Marcin Zaba
Head of Marketing
SyndicateRoom
35 InvestorsAva Scott
The creation of crowdfunding as a form of
investment was enabled by changes in the FCA’s
regulation in 2000. Roberto noted that “regulation
changes in early-stage fintechs can always be a
challenge,” and funding platforms should continue
to work with the FCA in the UK to balance high
standards and regulatory requirements with
innovation in this sector.
However, if crowdfunding platforms cannot illustrate
their activities as sound financial investments,
the challenges faced in regulation and building an
investor-base may be irrelevant.
There have been two IPOs and 35 acquisitions of
companies that have used crowdfunding. Seedrs has
backed the two companies that have reached IPO
(FreeAgent and Coinsilium) and eight of those that
have been acquired, while Crowdcube has backed
17 of the acquired companies. Crowdcube has also
backed three of the UK’s Unicorn companies (those
that have achieved a valuation of $1b or more), and
Luke “firmly believe[s] that the next generation of
unicorns... will be fuelled by their customers.”
Marcin shows less conviction in the investment
model, which is further demonstrated by
SyndicateRoom’s movement away from the
crowdfunding model completely: “The average
growth rate (CAGR) across all companies that have
received equity investment is 30%; the performance
rates published by crowdfunding platforms have
been significantly below this.”
Marcin proposes that unless these figures improve,
or the ecosystem sees some big, notable exits
by crowdfunded companies, investors may lose
confidence in crowdfunding as an asset class.
2020 visions
With the increasing demand for investment from
early-stage companies, crowdfunding platforms
cannot be complacent. Crowdcube and Seedrs have
big plans for 2020 and beyond. Roberto from Seedrs
adds, “after our successful 2018 and 2019, this year
we will continue our journey to becoming a full-scale
platform for investing in private companies.Think
about what Amazon did for eCommerce, but in the
context of VC, private equity and investing.”
Luke describes how the increasing preference for
later-stage, VC-backed businesses has borne out
on the Crowdcube platform, with these companies
looking to raise over £5m. He expects this trend
to continue into 2020, “as more businesses
understand the benefits, through increased revenue,
engagement, loyalty and advocacy and of turning
their community into shareholders.”
SyndicateRoom will be continuing its work with
its new fund Access EIS, launched in 2019. Using
Beauhurst data, the team created an index of
the best performing ‘super-angels’ and their
investments, and are looking to co-invest with
them across all their investments. Moving away to
a market-level, portfolio approach to investment,
Marcin says we "by investing across the entire top-
end of the market, we want to become early backer
of every single future British unicorn, not just those
that happen to crowdfund." By following angels on
their investment, SyndicateRoom looks to facilitate
quicker funding rounds and periods of due diligence,
allowing companies and their investors to "get on
with it". SyndicateRoom has completed 17 fundraises
with this new model so far, each of them closing
within a month.
Our experts have big ambitions, taking different
approaches and funding models to support young
businesses. With such a successful year in 2019
behind them, we’ll be keeping an eye on the data
to see if crowdfunding continues this momentum
through 2020 and beyond.
With nine years
of rapid growth
behind them,
crowdfunding
platforms are
looking stronger
than ever.
“
36 InvestorsParliament rejected Theresa May’s withdrawal
agreement from the EU by a record margin
in January 2019, setting the tone for a year
characterised by political and economic drama—
and a volatile pound. The events that followed: the
rejection of a second deal, May’s resignation, the
prorogation of Parliament and its ruling as unlawful,
the Brexit extension and the December general
election all helped Sterling to live up to its new
moniker; the Great British Peso.
Beauhurst data suggests that foreign investors took
advantage of the currency’s volatility to invest in
and purchase high-growth British businesses at
attractive prices. Over the course of the year, private
businesses secured 481 equity deals involving at
least one foreign investor, an increase of 24% since
2018. Combined, these investments were worth £9b,
more than double the £4.4b raised in 2018.
While this increase in both total money invested
and number of deals may be representative of the
growing amount of capital available globally, it is
significant in the context of a 3.7% decline in total
deal numbers in the UK since 2017. If the increase in
deals is due to bargain hunting on the part of foreign
investors, it is important to recognise that it is also
a vote of confidence in the UK as a place to conduct
business over the longer term.
Of course, the true test of confidence is whether
foreign investors are prepared to own UK-
headquartered businesses outright. The data
suggests that 2019 did slake buyers’ thirst for
ownership. The total number of acquisitions
involving a foreign acquirer or fund in 2019 was down
slightly to 175 deals compared to 194 deals in 2018.
Several of the larger deals were in the financial
services, perhaps indicative of depressed prices in
the sector due to the uncertainty surrounding access
to European markets.
foreign exchAngers
Among these was the acquisition of money transfer
company WorldFirst for a reported $700m (£545m)
in February by China’s Ant Financial. The remittance
company had only raised £265k over two equity
rounds since it started in 2004, meaning co-founders
Jonathan Quin and Nicholas Robinson and their
families owned 52% of the business at the time of
the sale.
Commentators noted that the deal was Ant
Financials’ first major foray into western markets,
following its unsuccessful attempt to acquire US-
based Moneygram in 2018, thwarted by regulators.
Overseas investors get sterling deals
investors in focus
Acquisitions of uk compAnies 2019 (cont. next pAge)
1 Feb
1 Mar
1 Apr
1 May
1 Jun
Nationality of acquirer
Australia
UK
Canada
China
France
Italy
Japan
Spain
USA

37 Investorsequity fundrAisings with foreign investment
1 Aug
1 Sep
1 Oct
1 Nov
1 Dec
Size of bubble £23.5m £544.6m
£2b
£4b
£6b
£8b
£10b
2019
2018
2017
2016
2015
2014
2013
2012
2011
100
200
300
400
500
Number of deals
Amount invested
Acquisitions of uk compAnies 2019 (cont.)
Audio network
Founded in 2001, this music licensing platform is used by
content producers and brands including the BBC, Mercedes
and Vice. It was acquired for £169m in April 2019 by Canada’s
Entertainment One with the potential for an earnout worth up
to £9m paid through shares.
Audio Network had raised £2.7m in eight rounds and grown
sales to £23m in the year to March 2019 with EBITDA of £6.5m.
In December, Audio Network’s new owner Entertainment One
was acquired by US toy company Hasbro for a reported £2.9bn.
crypto fAcilities
Cryptocurrency exchange and futures trading platform Crypto
Facilities was acquired by US counterpart Kraken for £76.5m
in February 2019. The company incorporated in 2014 and
raised a £1.1m round in 2016 from venture investors including
Playfair Capital, String Ventures and Digital Currency Group. It
is regulated by the Financial Conduct Authority and provides
cryptocurrency pricing data to banks, traders and data vendors.
Since the deal, Kraken has continued its consolidation in the
sector, buying assets from US-based Circle and acquiring the
Australian exchange Bit Trade.
invertek drives
Welsh electronic drive manufacturer Invertek was acquired in
September last year by Japan’s Sumitomo Heavy Industries in
a deal worth up to £100m. Invertek has been operating since
1998 and specialises in the design and manufacture of variable
frequency drives that control motors in a range of industrial
applications including pump control, air fan management and
elevators. Sales hit £35.3m in 2018 with EBITDA of £6.5m.
38 Investors
39 InvestorsWorldFirst’s competitor Ebury sold a 50.1% stake
to Santander in November for £350m. The foreign
exchange brokerage had secured £78.8m in eight
rounds since starting in 2009 from backers including
Vitruvian Partners, 83North and Greylock Partners.
Sales hit £43.7m in 2018 at the loss-making
company. At the time of sale, Ebury said it would
continue to operate independently of Santander but
benefit from the bank’s scale in serving SMEs trading
internationally.
Also in November, Prepaid Financial Services
was acquired by Australian-listed company EML
Payments for £226m with an additional earnout of
up to £55m. Since starting from the founders’ kitchen
table in 2008, the e-money service provider has
grown to turnover of £65.5m in 2018 with EBITDA of
£9.3m. It has bases in London, Ireland and Malta—
due to its acquisition of Maltese software developer
Spectre Technologies in 2017. EML Payments said
that the deal would provide a more diversified
financial footprint with access to eight new markets.
geogrAphic diversificAtion
Outside of financial services, a significant deal in
the high-growth space was the £337m acquisition of
molecular imaging company Blue Earth Diagnostics
in June by Italy’s Bracco Imaging. Since starting
in 2013, Oxford-based Blue Earth had received a
£500k Innovate UK grant and £40.8m in three equity
rounds. The funds have been used to support its
commercialisation of PET imaging agents to detect
prostate cancer. Sales hit £58.5m in 2018 with EBITDA
of £16.4m. The deal generated a 10x return for Blue
Earth’s former owner, FTSE250-listed lifesciences
investor Syncona.
Canadian bus-maker NFI Group also used 2019 to
strengthen its offering away from home with the
acquisition of UK counterpart Alexander Dennis for
£320m in May. The Edinburgh headquartered group
was formed in 2004 when investors acquired assets
from collapsed vehicle manufacturer Mayflower
Corporation and has vehicles in service in Europe,
North and South America and Asia. Sales were
£630m in 2018 with EBITDA of £43.7m.
A volatile pound may have contributed to the record
level of foreign investment in the high-growth space
during 2019. However, the inward investment
and the relatively strong market for UK growth
businesses suggests confidence on the part of
investors in the continued economic strength of the
UK outside the EU. Hopefully the funds raised and
the equity released during 2019 will stimulate the
high-growth ecosystem to new highs during 2020.
equity investments
with a foreign investor
175
acquisitions involving a
foreign acquirer or fund
481
Dan Robinson
40 Our data Driven by our platform
All data featured in this report is available on Beauhurst —
the best way to discover, track and understand high-growth
businesses.
Beauhurst makes creating data-driven thought leadership
easy. Up-to-the-minute data, sector trend maps and funding
stats allow you to stay on top of the high-growth economy.
beAuhurst dAtA
41 In ReviewFind out more at beauhurst.com
42 In ReviewEditor
Hannah Skingle
Contributors
Henry Whorwood, Ava Scott, Jo Hawkins, Dan Robinson
Design
Ella Halmari
© Beauhurst 2020