Venture capital investors backed 47 businesses across the North in the first half of this year with Liverpool-based augmented reality business v-Time securing around £6m. Tony McDonough reports

Start-up businesses in the North of England have benefited to the tune of around £90m from venture capital (VC) investors in the first half of 2018 – with one of the biggest deals in Liverpool.

In the latest quarterly report into global VC trends published by KPMG Enterprise (data by PitchBook) it is revealed that money was invested into 47 businesses across the North out of a total of 449 deals across the UK.

Social network

Fourth-biggest deal was an investment of around £6m in Liverpool-based v-Time, an augmented reality business that has created a a free-to-play virtual reality social network.

Its app allows groups of up to four users to jump into VR and talk in what is essentially a private chat room. Users can customise an avatar and select a 3D environment to host the chat inside.

While the first half of 2018 has been steadily busy for VC investment in the North, other parts of the UK have seen activity pick up in Q2 after a slower start.  The surge in activity in Q2 has propelled the UK back to the top of the European VC market.

VC investments were spread across the North in H1, with notable hubs in cities such as Manchester, Leeds, Newcastle, Sheffield and Liverpool.  Active investors include the Northern Powerhouse Investment Fund and Deepbridge Capital, each with multiple multi-million-pound deals completed.

Investment appetite

Graham Pearce, KPMG’s head of technology in the North, said: “It’s encouraging to see that continued uncertainty in the macropolitical and macroeconomic environment does not appear to be substantially hampering appetite for investment in UK startups, especially in the North, which has had two strong quarters in a row.

“The estimated total turnover of tech businesses across the North was around £7bn in 2017.  Manchester is still leading the way, but with thousands of new tech companies born each year, the sector is becoming increasingly important to the wider regional economy and attractive to international investors.

“With around 200,000 jobs in tech businesses across Manchester, Leeds, Newcastle, Sheffield, Liverpool and Hull, Virtual Reality is also booming.  In the past 12 months alone, nine VR businesses have raised around £12m in total from investors, and we expect this to keep growing at pace.”