Sunday 29 March 2020

*UKHotViewsExtra* Early-stage funds still investing but at lower valuations

logoA straw poll conducted by our very good friends at Corporate Advisory network, ScaleUp Group, suggests that early-stage funds (Series A and up) are still investing, although the vast majority expect valuations will be significantly lower than pre-C-19. The poll included both VCTs (venture capital trusts) and non-VCTs.

Among the funds who responded, nearly 80% said that C-19 has not stopped them investing in new opportunities or in their existing portfolio, but of those, 90% said that they expected valuations to be significantly lower, especially for sectors such as hospitality, travel, sports and leisure.

However, most (90%) of funds who continue to invest in new opportunities did not expect that the C-19 crisis would significantly lengthen the due diligence process.

It must be said that this poll is not a fully representative selection of the more than 80 funds that ScaleUp Group regularly deal with. However, the polarisation of the responses to each question suggests that these responses may be a useful indicator as to the thinking of other funds. If so, I think these results are encouraging. Since the beginning of March, we have published commentary on funding rounds of no fewer 30 startups and scaleups in UKHotViews (TechMarketView research subscription service clients can search on posts tagged ‘funding’) compared with 31 in February and just 23 published in March 2019.

UKHotViewsPremiumTechMarketView research service and UKHotViews Premium subscribers can also see some of the anecdotal comments from the funds polled in UKHotViews Extra.

We will be publishing our regular quarterly analysis of UK tech funding deals in the next edition of IndustryViews Venture Capital in a few weeks’ time. The Q4 2019 edition is available now for download by TechMarketView research service and UKHotViews Premium subscribers.

Posted by Anthony Miller at '15:59' - Tagged: funding   startup