The appeal of UK businesses to international investors, particularly from the US, has been highlighted by a new report showing high-growth British companies have raised £19 billion in the last three years in deals involving foreign investors.
The report, ‘Trading Places’ from Barclays and Beauhurst, shows that nearly half of total equity investment in high growth firms has been funded by deals with at least one foreign investor. It points to a boom in American investment in UK high-growth firms, with US investors involved in deals worth £4.5 billion in the last year. The total value of deals involving US investors was up 620 per cent during the past decade. Equity investment into software companies was the most popular among international investors between 2011 and 2020 followed by internet platform, mobile app and analytics companies.
Dr. Bipin Patel, CEO & founder of electronRx, an AI-driven consumer insights platform based at Barclays’ Eagle Lab in Cambridge, said: "….Our international investments helped us to significantly grow out our team in the midst of the pandemic, to continue to make new client partnerships and secure numerous clinical trials to collect the data we need as our tech moves towards regulatory approval. We look forward to once again sharing our vision and progress with international investors in our upcoming Series A round."
The report also shows the value of deals involving EU investors hit a high at £2.4 billion in 2019 and Innovate UK gave £1.1 billion in grants to high growth firms in 2020.
Katherine Morgan, head of high growth and entrepreneurs at Barclays, said: “More people are considering starting a business now than ever before, and it’s no surprise given the success of our home-grown entrepreneurs, many of whom have skilfully utilised international markets, generating new jobs and driving economic growth."
“It’s clear from our customers that both the international and EU are equally attractive when it comes to raising funds, tapping into talent and expanding into new markets.Their continued innovation and pragmatism will be vital as we recover from the economic damage that the pandemic has inflicted on the world.”
The ‘Trading Places’ report makes a series of recommendations to entrepreneurs and business leaders who are considering scaling their business:
Explore foreign investment – British entrepreneurs and business leaders should consider the funds and expertise that foreign investors can bring to the table, as these investors look to the UK to diversify their portfolios both geographically and sectorally
- Tap into international talent – Those looking to start a new venture should consider the connections and experience that an international co-founder can bring
- Consider foreign acquirers – US buyers were responsible for 40% of the top 20 acquired companies by valuation over the last 10 years. Business leaders should consider adding some overseas buyers to long lists when weighing potential exits.
Barclays is running a Global Connect programme in September encouraging more high growth firms to learn about international markets. A number of firms will be heading virtually to San Francisco as part of an established four-week programme designed to teach start-ups the fundamentals of raising institutional funding.
To find out more about Barclays support for High Growth businesses visit: https://www.barclays.co.uk/business-banking/sectors/entrepreneurs/
