Latest startup data: overall investment is down by 50% and seed-stage startups are being hit hardest

Plexal has teamed up with research company Beauhurst to analyse how the lockdown and COVID-19 is affecting UK businesses. And our latest data, which covers the period from 23 March until 18 May, shows that the pandemic is hitting seed-stage startups hardest.

Overall, there were 35% fewer deals and a 50% drop in funding compared to the same eight-week period in 2019.

There have been 61 deals for first-time tech startups, which represents a fall of 20% compared to the same eight weeks last year. The total value invested into tech startups raising investment for the first time is 83%. lower, year-on-year.

  The biggest five deals since lockdown include:  

  • Cazoo £100m
  • Onfido $100m
  • Bought By Many £78.4m
  • Privitar $80m
  • Compass Pathways $80m
  •  

The biggest five deals for British tech startups that haven’t previously raised investment include:  

  • Audiens £6.4m
  • Living Optics £3.3m
  • Primer £3.2m
  • Addionics £2.8m
  • IRIS £2.4m

The tech sector has been leading investment activity since the lockdown began, with the highest levels of investment going to startups operating in fintech, artificial intelligence, digital security and blockchain. And it’s great to see that Privitar’s $80m raise was the fourth biggest in the UK since the lockdown began (Privitar has been through Plexal’s cybersecurity accelerator).

Andrew Roughan, managing director of Plexal, commented on the findings: “While tech companies are still raising funding in the UK, we risk losing a generation of tech entrepreneurs at the earliest stages of their startup journey. By only backing companies that have already raised funds, investors are ignoring the very companies that will define the future success of the British economy.”

 

  “Surviving the pandemic is only half the battle. We must do what we can to thrive when the market recovers.” – Daniel Ng, CEO of CyberOwl  

 

  And Daniel Ng, CEO of LORCA graduate company CyberOwl, (which raised £1.8m in April 2020), also shared his views on the state of funding for startups: “Closing our round just before the lockdown puts CyberOwl in a resilient position to continue our growth.  

“There are some difficult decisions ahead, but for now our main priority is to help struggling customers strengthen their resilience in the face of increasing cyber risk. If we have to go above and beyond in these times, we will. Surviving the pandemic is only half the battle. We must do what we can to thrive when the market recovers.”

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