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Following up on UK tech funding data

We received quite some attention for our previous post about UK funding data. Here’s how Business Insider picked up on the story. In short: London & Partners announced that UK funding grew by $1.5 billion (70%!) from $2.1 in 2014 to $3.6 billion in 2015, citing CB Insights as source. This didn’t sound right to us. Our data indicates a roughly equal amount of funding in both years. London & Partners and CB Insights are standing by their original claims (except for the Zopa correction), but have yet to provide any backup for them.

Now CB Insights is up in arms. Its founder Anand Sanwal went to Twitter complaining about Dealroom’s “attacks” (?) and dismissing Dealroom data as “fundamentally flawed”, “not credible”, and “garbage”, while providing some specific examples from the data we published.

I will now address each of his examples individually. Some are interesting, some are questionable, and some are wrong. None of them will provide a foundation for the claimed 70% growth figure nor bring us much closer to most of the other numbers they provided.

CBI example 1: “Dealroom missed O3B Networks (which raised $510M in 2015)”.
Response: O3B Networks is a telco/satellite business. This round wasn’t even mentioned in the top-10 by London & Partners themselves… Presumably because they don’t consider it tech and/or because its operational HQ is in Amsterdam.

CBI example 2: “Dealroom wrongly included Helios Towers Africa ($630M in 2014).”
Response: Anand didn’t make clear why Helios Towers should be excluded per se (because Africa? because telco?) while O3B Networks should be included. It is up to London & Partners to decide whether Helios Towers and O3B Networks should be included or not. Either way can be argued, but where’s the consistency?

CBI example 3: “Dealroom wrongly included healthcare”
Response: A quick glance at Dealroom data seems to show that UK healthcare funding in our database in 2015 was about $50M lower than 2014. Still quite far from the $1.5-2 billion growth gap we are trying to close. Adjacent sectors can be easily filtered out in our data.

CBI example 4: “Dealroom missed 20 deals in Q4 2015”
Response: Could be; we are still finalising the last quarter. If true, this means the actual 2015 number is even slightly higher. But I suspect it wont get us much closer to 70% YoY growth. If only we could compare our lists…

CBI example 5: “Dealroom included D30, Cambridge Satchel, Giggling Squid”
Response: D3O and Cambridge Satchel are both part of the City AM Leap 100 List of fast growing UK companies, both received significant VC funding, and both are tech/online (Cambridge Satchel’s website has 210K visits according to our latest estimates, and it chose Index Ventures as investor partly for their digital expertise). London & Partners could opt to exclude them, but I am not sure they should. We do agree that Giggling Squid is beyond tech (as is crowdfunded Chilango for that matter); as retail concepts they are relevant to the online food delivery industry’s strategic landscape. Our database accurately marks them as “offline” so they can be filtered out easily. But again, this wouldn’t make a dent in the overall conclusions or get you to 70% growth.

Any cherry-picking will have to be done in both 2014 and 2015. Eliminating certain companies would not get us to a vastly different YoY growth figure, unless if one wanted to torture the data into this direction.

It’s a shame that CB Insights went directly into defense-mode. In our initial post, we published all Dealroom data unfiltered, for the benefit of everyone. We pointed out that London & Partners’ 2014 funding number is likely too low, and therefore the YoY growth too high. We made an educated guess that this is due to the fact that CB Insights only started to track UK deals recently and that London & Partners (not a data firm, after all) was unaware of this. Our original post was far from hostile. At Dealroom we saw an opportunity to compare notes and get to a more complete and accurate picture. It is perfectly ok for anyone, even the venerable CB Insights, to make mistakes and correct them. CB Insights is on a roll, but that does not mean their data is impervious to error.

For the record, here is again our full underlying data per individual round (each table can be ranked by date or by size):

2014: 2014 Q1 , 2014 Q2 , 2014 Q3 , 2014 Q4

2015: 2015 Q1 , 2015 Q2 , 2015 Q3 , 2015 Q4

If the 70% growth claim can be backed up by data, why not just present us the facts? If, on the other hand, the 2014 funding figure is missing some deals, publish a correction and let’s move on. Mistakes and omissions are ok, if corrected when found.

Finally, a word to London & Partners. I would like to express our interest to work with you to review and consolidate the data to get to an accurate and complete list. Maybe we can get the Tech.eu Team on board as well so we have a European based “dream team”. A more accurate picture will then surely emerge.