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Despite fears about the Budget and Donald Trump, venture capital rebounded strongly in 2024 and the view is looking optimistic for the years ahead, says Nicole Lowe
It is fair to say that 2024 was a rollercoaster year when it came to venture capital (VC) investment.
Major elections and political shifts on both sides of the Atlantic created an atmosphere of the unknown for investors with many initially reacting with caution to see how the impact of local and global events would play out before making any major decisions.
Despite this, I am delighted to have seen an overall positive outcome for businesses seeking investment in 2024, with strong signs of this continuing in the early parts of 2025 and beyond.
The recently released KPMG Venture Pulse report covers venture capital trends over the past 12 months showing that the UK attracted the highest level of VC investment in Europe in 2024 after a strong final quarter.
The UK raised a total of £15.5bn VC investment after funding in Q4, jumping by more than a third from £3.1bn to £4.4bn.
The UK raised a total of £15.5bn VC investment after funding in Q4, jumping by more than a third from £3.1bn to £4.4bn
The strong rebound in Q4 has boosted optimism among investors and founders looking ahead to 2025, with many predicting that the ongoing rise of AI is likely to remain at the forefront of those looking to invest.
But these positive tones have been cited with a degree of caution, with some analysts saying that the impact of both global and domestic events such as the UK Budget measures and the new US President taking office could still contribute to a level of investor caution.
Figures from across the year did highlight that London-based businesses continued to dominate the funding landscape, but regional areas such as Manchester, Edinburgh, Bristol, Nottingham and Cardiff also won big during the year.
The interest in regional investment comes as firms look to take advantage of larger funding pots being aimed outside London and the ability to offer staff a different quality of life.
The majority of funded firms were venture-capital based, again something that has trended throughout 2024.
Deals are getting larger and later
So how does this fit into the global outlook? Much like the UK, VC investment globally rose from £286bn across 43,320 deals in 2023 to £301bn across 35,684 deals in 2024. This is a great result despite a multitude of challenges, including global conflicts and geopolitical tensions, uncertainties associated with a significant number of major elections and a protracted IPO drought.
Interestingly, average deal size rose by 21 per cent, indicating a higher number of larger and later stage deals in the past financial year.
2024 finished strong, helping carve out an optimistic view for the new year from businesses looking to scoop investment and also for investors looking to support the next big thing.
Nicole Lowe is UK head of KPMG’s Emerging Giants
