Growing businesses in the Midlands secured £110 million in venture capital investment in the third quarter of the year, according to KPMG UK’s latest Venture Pulse report.
A total of 31 innovative companies, 17 in the West Midlands and 14 in the East Midlands, received investment in the third quarter of the year, highlighting that the UK scaleup ecosystem continues to appeal to investors but they are increasingly cautious about how much they are investing.
Joining the Midlands Engine Investment Fund (MEIF) as a leading investor in the region, FSE Group also supported SMEs in the Midlands with growth funding.
Among the companies securing investments were Onto, the all-inclusive electric car subscription, and Worn Again Technologies, the recycling firm working to rehaul the textile industry. This signals the growing investor interest in companies with genuine environmentally friendly credentials.
Khush Purewal, partner and head of deals at KPMG in the Midlands, said: “Amid a growing energy crisis, economic turbulence, continued pandemic impacts and increased pressures on businesses, funds continue to flow into businesses across all sectors in the Midlands, particularly those with strong ESG roots.
“Whilst some VCs will be focussed on existing portfolios, many have a commitment to investors to deploy capital so there is still dry powder and opportunities for good businesses with solid growth plans.
“Competition for good businesses in strong sectors will be fierce and could lead to some deal heat as we head into the final quarter of the year. However, as the economic conditions continue to deteriorate, it is likely that VC investment will remain subdued heading into Q4 2022 and beyond.”
