10 Sep 2021
Ten years ago there were only five such deals – where £ 50million or more was invested in UK companies.
However, the report, released by UK law firm Shoosmiths in partnership with data platform Beauhurst, reveals that in the first half of 2021 there were 51 mega-deals. More than half were ‘gigadeals’ – equity transactions of £ 100million or more.
The 51 mega-agreements in the first half of the year already exceed the total amount for 2020 (44) and surpass the previous record set in 2019 (38).
When it comes to mega-investments, it’s mostly tech companies that benefit. UK fintech, software and life sciences companies dominate the industry ranking by number of mega-operations.
The majority of companies that have raised funds through mega-deals are located in London and the south-east of England, although a “modest proliferation” of mega-deals elsewhere may indicate green shoots far from the British capital, notes the study.
The report also discusses investment trends, revealing that 2021 is likely to be a pivotal year for venture capital mega-operations. A record amount was also invested via mega-deals, with £ 6.5bn invested in the first half of 2021, surpassing the highest annual value of £ 6.2bn invested via 38 deals in 2019.
Factors behind the ‘unprecedented’ number and volume of mega-deals include the record-breaking economic stimulus that has been used around the world to mitigate the impact of the pandemic, as well as the transfer of capital to technology sectors. that performed well during the Covid crisis, such as Software.
James Klein, Head of Technology and Corporate Partner at Shoosmiths, which has offices in Edinburgh and Glasgow, said: We see that reflected in the offerings we offer here at Shoosmiths.
“What we learn from the report is that the majority of the companies that raised investments for mega-deals were in London – so it is important that the UK venture capital investment activity continues to occur in all regions.
‘A small proliferation of mega-deals elsewhere in the UK may indicate this is starting to happen, but perhaps more steps need to be taken to raise awareness of investment opportunities and the support available for large-scale businesses. outside of London.
“With the majority of fundraising operations taking place remotely in 2020, it will be interesting to see if the pandemic has challenged the idea that a presence in London is needed to meet – and introduce – potential investors.”
Henry Whorwood, Head of Research and Advisory at Beauhurst, added: “The sheer number of mega-deals signals not only the maturation of the UK start-up and scale-up ecosystem, but also new ones. types of investors who see the potential of both UK and high growth companies. 2022 is also expected to see an impressive number of such transactions. “
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