Yorkshire venture capital investments attract more than £11m in first quarter but figure is 23 per cent lower than last year

However, the overall Yorkshire figure was 23 per cent lower than the £14.6m raised by Yorkshire businesses in the opening three months of 2023 and far below the £53.8m raised in Q1 2022.

In 2023, there were a total of 85 venture capital investments in Yorkshire and the Humber worth more than £172.54m combined.

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Nationally, venture capital investment into UK businesses continued to slide in the opening quarter for 2024, falling to levels last seen in 2018.

UK businesses raised $4.9bn (£3.87bn) in the last quarter of 2023 but only $3bn (£2.37bn) in funding was raised in the first quarter of 2024 - the lowest amount seen in 22 quarters.

Following the pandemic, 2021 and early 2022 saw huge appetite for VC investment into UK innovation and fast-growth businesses but the last two years have seen a more challenging economic environment with the war in Ukraine, high inflation and increasing interest rates all having an impact.

The Venture Pulse report recorded just 519 deals in the period, levels not seen since 2016. While deal volume was very subdued, deal sizes remained quite healthy as venture capital investors focused their funds on the most promising start-ups.

Phil Murden, office senior partner for KPMG in Leeds, said: “We have fantastic start-ups in our region that are attracting venture capital investments as they look to grow and scale-up.

“With a subdued start to the year and ongoing economic uncertainty, it is clear that investors are still cautious when it comes to where they’re putting their money.

"Early stage businesses in Yorkshire and the Humber that are looking to raise funds over the coming months will hope for greater certainty to encourage venture capital investment in the region.

"For now these businesses will need to face into the higher levels of investor scrutiny over their business plan and strategy for a positive outcome.

“The good news is that deals are still getting done and there remains an abundance of capital to be deployed across the region for those with a clear value proposition. I remain positive that market activity will pick up in the following months.”