Venture capital funding for startups strong, shows report

A recent report from Big 4 firm KPMG in association with CB Insights says the UK economy is the European ‘hot spot’ for investment in start-ups.

The 'Venture Pulse Q3 2015' did however point out that the amount invested in the UK has fallen and is now at the lowest for five quarters.

Large deals

National tax leader for KPMG’s venture capital practice in the US, Francois Chadwick, explained: “Everyone is chasing really large deals.”

“It’s the herd mentality. Those that are coming in late suddenly feel like they’ve been left out, not invited to the party, and they now need to buy the really expensive ticket to get into the party,” he said.

The report highlighted the fact that the UK saw several big investments in healthcare related companies in Q3 2015. It points out that "all aspects of healthcare appear to be on the UK VC investment radar."

Continuing trend

VC backed companies in Europe struck 990 deals in the first three quarters of 2015, and the amount on investment in Q3 was the highest for almost five years.

KPMG believes the trend will continue, with an emphasis on more high tech companies.

Tim Dümichen, a partner in KPMG Germany, said: “We believe that we will see a renaissance of high tech engineering products, of hardware products and of the Internet of Things in Europe and, in particular, in Germany, in the near future.”

“It is a sleeping giant that has already started to wake,” he added.