Increased VC investment generates growth in flexible working
According to Workthere’s latest research report, Venture Capital funding in the UK reached a record high of £4.3 billion in H119, which is a 45% increase on the same period in 2018.
The report shows that the average deal size for UK VC investment doubled to £5.9 million in the first half of the year with 724 deals recorded compared to 1,147 in H118. In terms of where this money has been directed, tech has been the clear winner attracting 60% of all VC funding in H119, compared to 44% in the same period in 2018.
Jessica Alderson, global research analyst at Workthere, says: “Last year it was all about healthcare, but this year tech is the most popular sector for VC investors. In particular, the sub-sector that is really driving growth is Fintech, which has accounted for eight out of the top ten funding deals so far this year, compared to just three last year. Moving forward, this is definitely an interesting sub-sector to watch in terms of expansion outside of their primary London offices into wider UK markets.”
Workthere highlights that, in line with the surge in VC investment, these regions have also witnessed a yoy increase in take-up from serviced office providers who have recognised the potential for start-ups and scaling smaller businesses to expand. Central London saw flexible office providers account for 762,188 sq ft of take up in H119, compared to 729,602 sq ft in the same period in 2018.
Freddie Ward, associate director at Workthere, added: “Whilst overall venture capital investment in the UK has outpaced flexible office take up this year, there are some very obvious exceptions in the form of London, Aberdeen, Bristol, Edinburgh and Cambridge, where there seems to be a distinctive link between the two figures.
London is an established hotbed for VC investment, but it is particularly interesting to note the growing interest in regions where there is not only a strong university presence linking to new talent, but where there has also been strong inward investment and development that has made them an increasingly popular choice for occupiers in general.”
In terms of monthly desk costs for serviced office space, Workthere’s research notes that Edinburgh saw the largest yoy increase of 20% (current monthly desk cost £300), followed by Bristol and Manchester at 8% (current monthly desk cost £325) and Cambridge at 7% (current monthly desk costs £400).