Tech investments in the North have reached unprecedented heights in Q3 2017, totalling £207.6 million.
This remarkable figure signifies a quadrupling of growth compared to last year, marking a new milestone.
Substantial Growth in Northern Tech Investments
The Northern tech sector has witnessed unprecedented growth in Q3 of 2017, with investments reaching £207.6 million. This marks a significant increase from the previous quarter’s figures. The investments have doubled compared to Q2, and this surge reflects a nearly fourfold increase on an annual scale. Such a remarkable growth trajectory highlights the potential and appeal of the Northern tech market to investors.
Key Players and Major Transactions
The quarter’s most notable transactions include Old Mutual’s purchase of a minority stake in The Hut Group for £125 million. Push Doctor, an on-demand online GP service, also raised £20 million, showcasing the diverse opportunities within the tech ecosystem. Similarly, NorthEdge’s acquisition of a minority stake in Cubic Motion for another £20 million has spotlighted the region’s robust growth. These major deals underline the variety of tech innovations driving Northern advancement.
In total, the quarter saw 45 growth investments and 26 acquisitions, an indicator of the buoyant M&A environment. Graham Pearce, a tech sector lead at KPMG, cited that the surge is not tied to a single venture but reflects a broader trend of increased transaction volume in the tech landscape.
Sector Performance and International Interest
The software sector emerged as a frontrunner, attracting £30.4 million across 17 companies. This was closely followed by the internet and media businesses, securing £29.2 million in funding. The diversity in sector investment reveals the multipronged growth in Northern tech.
Overseas investments have historically focused on London, but the trend is shifting. Recent funding rounds in the North West, with capital from the US, Europe, and Asia, have significantly broadened the investor base.
The £20.2 million raised by Push Doctor, involving Silicon Valley’s Partech Ventures, is a prime example of such international interest. This influx of overseas funds signifies a transformative shift towards recognising the North’s global potential.
Role of the Northern Powerhouse Investment Fund
Launched in February 2017, the Northern Powerhouse Investment Fund has played a pivotal role, albeit in smaller scales. Four investments under £1 million were made in the third quarter, supporting tech start-ups in Yorkshire and the North East. This initiative is essential for nurturing early-stage businesses and fostering innovation.
Such backing has significantly contributed to the overall investment environment in the North, enhancing the competitive edge of tech start-ups. The fund’s strategic focus promotes entrepreneurial activities and regional growth.
Resilient M&A Market Post-Brexit Vote
The Northern tech sector’s M&A activities have rebounded post-Brexit, demonstrating a regained confidence. A total of 26 acquisitions within three months marks a 79% increase from the previous year. This trend indicates resilience amidst economic uncertainties.
According to Graham Pearce of KPMG, the robust M&A numbers show that the turmoil following the Brexit vote has begun to stabilise. He notes, “The market’s adaptation reflects a renewed assurance in the Northern tech sector”.
The rebound in M&A activity positions the Northern region as a prominent player in the tech industry, equipped to attract further investments and opportunities.
Diverse Impacts Across Tech Subsects
The expansive growth impacts a wide array of subsects, with software and internet media holding distinct leadership roles. Such dynamics contribute extensively to the technological landscape of the region. Funding attracted by these sectors underscores their strategic importance to the Northern economy.
The varied influence on different tech subsects ensures a balanced development agenda, facilitating comprehensive advancements.
Strategic Outlook and Future Expectations
The burgeoning investment trends in Northern tech reflect a promising outlook. Stakeholders are optimistic about sustained growth. As the sector continues to attract capital from both domestic and international investors, it is poised for further expansion.
Investors are likely to leverage the region’s potential for fostering innovation and gaining competitive advantage in tech development.
The Northern tech sector’s Q3 success illustrates its robust growth and international appeal.
With capital flowing from diverse regions, the outlook for Northern tech remains optimistic.