Is the tech boom at an end? London VCs aren't worried
The tech startup bubble may be over — though mega-deals suggest there's life in VC funding yet.A report from KPMG has revealed the number of venture capital deals has continued its "gentle" slide, down seven per cent from the first quarter of this year to the second and down by a quarter from last year.Investment is up 55 per cent this quarter to $40 billion from $29.5 billion the previous quarter, but that's been boosted by a handful of "mega deals" over $500 million including a record $5.5 billion raised by Didi Chuxing. The quarter saw the largest number of unicorns created in two years, with 16 firms valued over $1 billion. But even with such cash splashing around, funding is still down 14 per cent versus the same quarter last year, sparking Asus Customer Service Uk suggestions the tech startup boom has busted. Don't panic, says Harry Briggs, partner at BGF Ventures. "First, it's worth stressing that according to these figures, Q2 2017 was the fourth biggest quarter for UK venture funding in the last decade," he told WIRED. "So rumours of decline are greatly exaggerated, and arguably there's been a massive 40 per cent rebound since Q4 of last year." Instead, it may be getting tougher for early-stage startups. "What does appear to be happening is a 'flight to later-stage' - the number of deals has roughly halved since 2014, whilst the amount of capital has remained about the same," Briggs said. There's still plenty of cash to go around, for those with proven ideas, at least.Why the flight to later-stage funding? Briggs suggests two explanations. "There is still a massive glut of capital managed from London — but unfortunately much of that capital is looking for high yield at low risk, which means piling into the companies that already seem like winners, in the B rounds, C rounds and later rounds," he said, which is why so much money is pouring into the likes of proven startups such as Deliveroo and Transferwise.
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