Bright future for London VC scene

Techcrunch reported yesterday that London startups raised $647m in Q1 this year, passing $500m in a quarter for the first time and up 67% from $411 in Q4 2014, which was itself a record. That’s great news for the startup ecosystem which has been short on capital for some time now, with the twin results that some companies are forced to invest more conservatively than they otherwise might whilst others move to the US and we lose their jobs and talent.

And there are lots of new funds coming online, so the growth looks set to continue:

  • Over the weekend the news broke that Rory Sterling, Harry Briggs and Simon Calver are launching a new £200m fund
  • Last night I was at a UK launch party for 500Startups (they have been doing deals here for a bit but are basing people here for the first time as a prelude to stepping up activity)
  • Gil Dibner has built a $550k syndicate on Angel List which Techcrunch says is ‘thought to be the largest outside the US’
  • There’s another decent sized fund by a prominent VC that’s launching shortly
  • Mosaic Ventures and Google Ventures launched last year and are still getting going

Meanwhile the longtime stalwarts of the UK VC scene are still busy making investments. Balderton, Accel, Index, Octopus, MMC and Wellington are the ones we’ve co-invested in at Forward Partners.

 

For those worried about bubbles, comparison with Silicon Valley suggests there should be plenty of headroom for growth in London and UK venture capital. The $647m invested in London startups in Q1 was just 13% of the $5.05bn invested in Valley startups (of which San Francisco was $2.13bn). Investment over there was therefore much higher than here both on an absolute and on a per capita basis.