VCTs prove resilient against wider venture capital industry decline
Venture capital trusts saw an 8% growth in deployment of capital over 2022, despite a staggering 23% drop in funding from the wider UK venture capital industry.
Data from the Venture Capital Trust Association (VCTA) showed that, during the 2022 calendar year, VCTs invested £664m across 345 investments.
Fundraising figures were also strong for the 2022/23 tax year, with £1bn of new capital raised for the second year running.
The wider UK venture capital industry suffered a 23% drop in funding. KPMG data suggests that global economic turmoil encouraged investors to take a more cautious approach. Deal volume also fell, with the number of deals completed last year (3,213) down 16% on the 3,830 deals completed in 2021.
The VCTA, which includes more than 90% of the VCT industry by value, also found that total sales of VCT-supported companies amounted to £18.2bn in 2022, an increase of 54% on the previous year.
Exports also rose significantly last year, with sales totalling over £3.7bn, a 29.8% rise on 2021’s figure, illustrating the growing number of businesses expanding overseas.
VCTA chair Will Fraser-Allen said ‘UK PLC is increasingly in need of innovative young businesses to push the economy forwards and help to drive growth by investing in new technologies like artificial intelligence. With government policy also looking to bolster UK growth by encouraging investment in fast-growing companies, the vital role of VCTs in the investment ecosystem has never been clearer.’