Report: Investment in Northern tech firms reached 10 year high in 2016

2016 was a record year for investment in Northern tech companies.

That’s according to data compiled by Pitchbook and analysed by Tech North.

According to ‘Tech North’s Investment Index: 2007 – 2016‘ report, investment in northern tech companies reached a 10 year high in 2016.

The report found that a total of £326.9m was raised by northern tech firms in 2016, representing an increase of 1,551% from the £19.8m raised in 2007, with the most significant growth taking place over the previous three years.

Although the amount of funding raised last year was far higher, 2015 saw a higher number of deals, with 93 deals completing in comparison to the 74 tracked throughout 2016.

The biggest increase in capital invested from one year to the next was seen in 2014 when the figure increased from £23.7m in 2013, to £169.6m in 2014.

James Bedford, Tech North’s head of investment strategy, commented on the findings: “It’s encouraging to see the 1,551% growth in investment finance going into Northern tech companies over the last 10 years, and even more encouraging to see that last year was the best year to date.

“The fact that more than half the top angel and VC deals were done in the last two years indicates an improving investment ecosystem,” he added.

Despite the seemingly positive news, Beford went on to note that access to finance for companies in the region remained an issue.

“The North’s digital ecosystem is still at an early stage but it has huge potential. This potential will only be satisfied if the ambitions of the entrepreneurs are matched by an ambitious investment ecosystem,” Bedford said.

Sector breakdown

E-commerce (led by two large deals closed by The Hut), FinTech (one large deal announced by Durham-based Atom Bank) and SaaS were the dominant sectors throughout the 10-year period.

Interestingly, SaaS was the clear winner when it came to the number of deals that took place during the time period.

According to the report, the North West (48%) led in terms of number of deals recorded over the 10-year period, followed by the North East (28%) and Yorkshire and the Humber accounting for 24% of transactions.