Startup funding sunk in third quarter however fintech and well being tech experience excessive

Enterprise capital funding raised by UK startups dropped sharply within the third quarter of 2024, new analysis has discovered, including additional strain for founders in search of recent funding.  

British startups secured round $2.9bn in VC funding in Q3, a 50% drop from the earlier quarter, in line with the most recent report from HSBC Innovation Banking and Dealroom. 

In response to the info, the third quarter of 2024 noticed the smallest quantity of startup funding within the UK up to now 5 years. 

However the funding development is broadly according to ranges seen in 2023. 

Fintech on prime 

Fintech has been Britain’s best-funded tech sector thus far this 12 months, pulling in $3.3bn, down from $4.5bn in 2023.  

The UK fintech sector is again,” declared Remus Brett, common accomplice at LocalGlobe. 

“Many scaleups, having emerged from a difficult funding market stronger than ever, are making a severe dent in incumbentsʼ market share.” 

High fintech funding rounds thus far this 12 months embrace Monzo’s £340m funding in March, which was later prolonged to $610m. 

A small handful of megarounds within the well being tech sector, together with Flo Well being’s £156m Sequence C and Myricx Bio’s £90m Sequence A, propelled it to second place, with $2.3bn thus far raised. 

Simon Bumfrey, head of expertise and life sciences at HSBC Innovation Banking UK mentioned the group anticipated this development to proceed as home and worldwide buyers are each displaying a eager curiosity within the sector. 

Bumfrey mentioned buyers see important “alternative” within the “UK innovation ecosystem”, prompting a “buoyant outlook for 2025 and past”.   

The report additionally discovered that the share of VC funding raised by British startups coming from abroad in 2024 is, thus far, one of many highest seen up to now decade. 

Round 70% of VC investments within the UK got here from overseas, the third highest within the final 10 years after 2019 and 2021. 

The UK has held its place because the best-funded startup ecosystem in Europe, with $12.4bn thus far, nearly Germany and France, which have raised $6.7bn and $6.5bn respectively in 2024.