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23 July, 2018 - 10:04 By Tony Quested

Cambridge hailed as VC capital of Europe

Venture Capital investment into Cambridge and the East of England region gained strength in the second quarter of 2018 as more than £291 million was invested, according to KPMG research.

A total of 22 VC investments were closed in the region between April and June, with Cambridge taking the lion’s share with 16 deals worth more than £192m; so Cambridge  attracted around 66 per cent of the region’s haul.

Half the region’s deals came in the healthcare segment and this region accounted for almost 19 per cent of the Q1 UK deals total funded by VC. Science & technology – notably cancer tech, robotics and AI-related deals were prolific.

Investments for Cambridge-based businesses included the £74m Series B venture funding for CMR Surgical which will use proceeds to prepare its Versius system for planned commercialisation.

There was also a £53m funding for Crescendo Biologics to advance the development of the company's lead program, CB307, which stimulates local activation of tumour-specific T-cells, and further expand its internal pipeline of products.

Earlier stage fundings included the £11.3m funding round for Fetch.AI from investors in Europe and Asia and an £11m of Series A venture funding for PhoreMost.

Elsewhere across the region there was a £7.5 million fundraise for Norwich-based Tropic Biosciences which will be used to commercialise the company’s non-GMO coffee and banana varieties and globally expand into additional crop segments; whilst Ipswich-based Chainvine raised £2.5m of Series A venture funding led by Deepbridge Capital.

In Essex, £89m was invested across three deals in Q1. The deals included a £28m Series A venture funding by Little Chesterford-based NodThera; a £15m fund raise by Brentwood-based EMoov to further enhance the company's technology platform; and £44m for Clacton on Sea-based healthcare business M&A Pharmachem.

Across the UK, a total of £1.55 billion of VC money was invested in businesses across 244 deals in Q2, with late-stage financings responsible for the majority of the capital invested - propelling it back to the top of the VC market in Europe.

This compares to just over £1.1 million ($1.5 billion) invested in Q1 of 2018.The UK accounted for six of the top 10 European deals done in the last three months, including Revolut (£188m), Freeline Therapeutics (£90m), CMR Surgical (£74m), Liberis (£61m), Culture Trip (£60m), and Crescendo Biologics (£53m).

Chris Wilson, corporate finance director for KPMG in the East of England, said: “Hot on the heels of a blockbuster 2017, we continue to see very healthy sums of VC invested in robust East of England businesses.

“Whilst Cambridge continues to draw widespread attention from international investors, it’s great to see large sums of money is being invested all over the East of England with deals in Norfolk, Suffolk and Essex contributing to the strength of the region’s startup ecosystem.

“The uncertainty in the macropolitical and macroeconomic environment does not appear to be substantially hampering appetite for investment in startups. Healthtech businesses accounted for nearly half of the investments received over the last three months, although we are seeing new groups of companies emerging, in particular in AI and blockchain.

“Already AI businesses are raising solid early and mid-stage funding rounds. Subject to successful R & D and commercialisation, they will surely attract even more funding going forward.” 

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