Confidence in UK technology companies hit as early-stage investment falls

May 20, 2019

The U.K.’s technology community has found it harder to attract investment since the Brexit vote, and many have a bleak outlook when it comes to finding backers over the next 12 months, according to a recent survey.

Some 28% of 200 technology advocates said they have experienced investors deferring investment decisions as a direct result of the uncertainty around the United Kingdom’s exit from the European Union, Tech London Advocates, or TLA, said in a May report. Also, 59% of those surveyed believe it will be harder to attract investment over the next 12 months.

TLA founder Russ Shaw said early-stage technology businesses looking for funding of up to £1 million have seen the investment pace slow over the past six months with early-stage investors such as angel investors deferring decisions on whether to invest in a business while there is still political uncertainty. Later-stage businesses backed by venture capital and private equity are not seeing the same impact, Shaw said, as earlier-stage businesses are riskier.

In the first quarter, the volume of U.K. technology deals dropped to its lowest level since the Brexit vote with 195 deals completed in the period, according to Beauhurst, a data firm focused on U.K. high-growth companies.

Tim Mills, who leads investment activity for the Angel CoFund, said the survey echoed what he has seen in the investment community. Angel investors are cautious about the economic and short-term investment cycles, he said, and they are not under the same obligations as institutional investors to deploy capital across a particular time frame.

You can read the full article on the S&P Global Market Intelligence website here