A research report from London & Partners and CB Insights is reporting a staggering 70% rise in tech VC funding in the UK. London & Partners is the Mayor of London’s official promotional company and CB Insights is a USA focused VC data aggregator. The report got media attention from the FT, Reuters, Bloomberg, and others. The following figures got headlines:
2015: $3.6 billion
2014: $2.1 billion
This would be remarkable if true and indeed has already fuelled the discussion about a “tech VC bubble”. Dealroom data shows a very different picture however:
2015: €4.5 billion ($4.9 billion)
2014: €5.1 billion ($5.6 billion)
11% decline (= insignificant, basically equal)
The full backup of Dealroom data per individual funding round is available here (scroll down to United Kingdom where we show the data per quarter, and each amount loads a report of all rounds in that quarter).
What isn’t important here, is the absolute difference between $3.6 and $4.9 billion. That may be attributable to definitions (e.g. how “tech” or “VC” are defined). What is important is the questionable 70% growth figure. That figure just seems at odds with the dealflow we have been tracking since 2014, and also not the type of % change you would normally expect in a fully developed VC market that is the UK (70% is is an “emerging market” type growth figure).
At Dealroom we don’t claim to have perfect data either, far from it. In fact, I would say that the 11% decline is insignificant and therefore our conclusion is that 2014 and 2015 are roughly equal (2014 was already a strong year). Our data sources don’t differ very much from CB Insights, but at dealroom.co we focus on Europe (and beyond) and we have an open-data model that allows us to benefits from thousands of contributors, to augment the data we aggregate. This probably led to us having more comprehensive data set over both 2014 and 2015. Our London data also looks rather different.
Whether or not there’s a tech bubble is a much tougher question to answer. We’d need to look at company performance data as well then. Data which incidentally dealroom.co is starting to track as well. We do strongly agree with the report’s conclusions that the UK and London are fantastic places for tech companies (large markets, lots of talent, and many VCs).