1、01 The Deal 2023 Equity investment market update01 The Deal 2023 ContentsMethodology0203Foreword04Key findings06Headline funding figures08Regional trends10Stages of evolution12Sectors14UK AI market18Sustainable business20Founder gender21Deal sizes22Biggest deals of the year24Valuations26Investors28S

2、mart city industry30Credits01 The Deal 2023 Data for the report was collected by Beauhurst and finalised on 26 January 2024.The report looks at all announced equity investments received by private companies headquartered in the UK,in all sectors.Equity rounds are found by monitoring thousands of inv

3、estment sources;Beauhurst also maintains relationships with hundreds of investors to receive information about their portfolio companies.In this context,equity investment refers to the issuance and sale of new shares by a company to fund its growth.To be included in the analysis,an investment must b

4、e:Dated between 1 January 2013 and 31 December 2023Publicly-announcedSome form of equity investmentSecured by a non-listed UK company The following types of companies are not covered in this report:Non-UK companiesPurely not-for-profit companiesCompanies whose shares have been listed on a stock exch

5、angeCompanies that are majority-owned by a fund or another companyProject companies,like those formed to create a film,stage a play,construct a solar farm,or undertake a property project.Methodology02 The Deal 2023 In introducing our latest edition of The Deal Ive set myself the task of trying to su

6、mmarise last years investment trends,without being or sounding like a pessimist.So for every stat thats down or stagnant,Im going to try to give the silver lining.Firstly,funding is down.That much you knew already.The number of announced deals is down by a quarter;the amount raised is down by almost

7、 a half.Its a big drop.But although we present these deals as one group,theres actually a lot of heterogeneity in the asset class.One reason the numbers have dropped is because weve seen tourist investors leave the market.These arent specifically funds from abroad(although many were),but rather the

8、funds for whom startups were an excursion from their normal territory.These funds had a lot of money to invest,so their departure is keenly felt in the statistics.Another reason the numbers are down is because weve seen the disappearancein the UK at leastof the capital-as-moat strategy.Few companies

9、 are raising at the moment to burn their cash to acquire market share(although some companies are having to raise significant sums to secure computing power for AI models).Overall,this slowdown in funding doesnt mean companies are dying.Although theres widespread news that insolvencies are at record

10、 levels,one has to remember that its a natural corollary with a higher number of companies in the UK that insolvencies and dissolutions should be at record levels in absolute terms.Thats not to say that we wont yet see it.A recurring theme Im hearing from entrepreneurs and investors is about hunkeri

11、ng down to survive what looks to be a tough year.George Whitehead,of ACF Investors,put it succinctly as Survive to 25.With 11 months to go,its not actually as bleak as it sounds.But readers of this report want to know what might bring deal activity back up?As much as one hears about dry powder,that

12、simple term neglects the complicated realities of the pressure on the wallets of many if not most Limited Partners(LPs).For the UKs startups and scaleups the key consideration at the moment(to my mind)is liquidity.Far and away the most common route to exit for equity-backed entrepreneurs and their i

13、nvestors alike is a trade sale.Until we see more of these,and at good valuations,the investment landscape for private companies is going to stay gummed up.From a wider macroeconomic view,election year giveaways could materially boost consumer confidence and unlock the cheque books of big corporation

14、s at the same time.Foreword12b Invested in 202320.6b Invested in 2022-42%since 2022Henry Whorwood Managing Director Research&ConsultancyDeals announced in 2023 2,179-25%since 2022Deals announced in 2022 2,91701 The Deal 2023 There were 11 gigadeals,and 26 megadeals throughout 2023Equity investment w

15、as at its lowest since 2018Investment continued to decline,with 12b invested into private UK companies throughout 2023Faith in early-stage companies and startups remainedKey Findings04 The Deal 2023 There was a decline in deals across most sectorsQ2 had the highest number of dealsLondon secured 48%o

16、f dealsScotland had 6%of deals,with the East of Scotland taking 3.5%Key findings 0506 The Deal 2023 2021 set a high standard,and its been difficult to live up to that record-breaking year since.The equity investment market saw a decline in 2022,and this has continued into 2023.It might not be the ne

17、ws we were hoping for,but theres still backing for early-stage companiesand from looking at the data,its likely that sectors such as cleantech,SaaS,and AI will see significant investment in 2024.Across the year,weve seen fluctuations in the number of deals closed.Like in 2022,most of the deals were

18、signed in the last half,but the drop off was significantly higherand we saw a lower number of deals in Q1 than we would normally.Just 593 deals signed in Q1 2023 compared to the 878 deals signed in Q1 2022.This could reflect the uncertainty of the UK economic Headline Funding Figures05000

19、25003000350004b7b11b15b19b22b26b20000222023Number of announced deals and amount raised by year1.1Number of fundraisingsTotal value of fundraisings020040060080002B4B5B7B2013-22013-42014-22014-42015-22015-42016-22016-42017-22017-42018-22018-42019-22019-42020-22020-4202

20、1-22021-42022-22022-42023-22023-4Number of announced deals and amount raised by quarter1.2landscape.As change seems to be inevitable,investors arent sure if now is the right time to invest,or hold back.One thing is clear,with elections in 50 countries this year,were likely to see more change in 2024

21、.Number of fundraisings Total value of fundraisingsHeadline funding figures 07One thing is clear,with elections in 50 countries this year,were likely to see more change in the new year”0500025003000350004b7b11b15b19b22b26b20000222023050002500300

22、0350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b2000022202308 The Deal 2023 It comes as no surprise that L

23、ondon has,once again,secured the top spot,with a huge 1040 deals made in the capital.This accounts for 48%of the total deals in 2023.The South East(198)made up 9%of the years deals,followed by the East of England(146)at 6.7%.This closely reflects the 2022 numbers,where London secured 49%of deals.Sco

24、tland accounted for 6%of all the deals,with the East of Scotland(76)securing 3.5%.A marginal difference from last year,where Scottish deals amounted to 6.3%of the total.There was a drop in deals in Aberdeen,from 24 deals in 2022,down to six deals secured in 2023.Wales had 64 deals,2.9%and Northern I

25、reland had 23 deals,1%.This isnt a significant difference from previous years,and Northern Ireland remains at approximately 1%of deals secured since 2021.Regional TrendsIt comes as no surprise that London has,once again,secured the top spot”01 The Deal 2023 Regional trends 09Scotland 6.1%Northern Ir

26、eland 1%North West 5.1%Wales 2.9%South West 5.2%South East 9%London 48%East of England 6.7%East Midlands 2.6%Yorkshire and the Humber 3.4%North East 2.6%West Midlands 3.2%2.1Proportion of announced fundraisings per region,202310 The Deal 2023 Stages of Evolution0200400600800020

27、000222023Stage of evolution by number of deals3.1Equity investment dropped slightly for seed companies but the number of deals remains the second-highest recorded,behind only 2022.There were 831 fundraisings for seed companies in 2023,down from 1027 in 2022,but greater than the

28、 724 fundraisings in 2021.Prior to 2021,the record number of deals was 428,so the numbers look promising for seed.Venture companies had the most deals,but also declined marginally from 2022,1154 fundraisings to 906.The largest amount invested was in growth companies3.9b.Despite this,growth firms als

29、o had the biggest decrease in the amount invested,declining over 50%.Established companies also saw a decline,dropping from SeedVentureGrowthEstablished906831311108Stage of evolution by amount raised3.24.1b invested to 2.9b.But had the smallest decline in number of deals,dropping just 34 deals.Overa

30、ll,the most invested in stage of evolution,by the number of fundraisings,was venture at 42%,followed by seed at 38%.This illustrates theres still faith in startups and early-stage companies in the UK market.Theres still faith in startups and early-stage companies in the UK market”01B2B3B4B5B6B7B8B9B

31、10B11B20000222023SeedVentureGrowthEstablishedStage of evolution 112.9b3.8b3.9b1.4b0500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b200002220230

32、500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b2000022202305000250030003

33、50004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b2

34、00002220230500025003000350004b7b11b15b19b22b26b200002220230500025003000350004b7b11b15b19b22b26b2000022202312 The Deal 2023 SectorsAs an unpredictable macroeconomic state remains,w

35、e continue to see a decline across all sectors in 2023,as we did in 2022.Blockchain had a huge surge in investment in 2021 and 2022,going from 132m invested in 2020 to 557m in 2021.However,theres been a decrease in investment in 2023with 399m of capital put into blockchain,and 82 deals secured.Has b

36、lockchain seen its moment in the sun?Some would argue no,with the rise of global investment into DeFi(decentralised finance).According to Statista,the global blockchain technology market is expected to grow from$5.9b to$1235b by 2030.Cleantech has seen a slight decline since 2022,from 270 deals and

37、2m invested,to 243 deals and 1.9b invested in 2023.It remains one of the most funded sectors,and could continue to grow as the UK government works towards net zero.The government also announced in February 2024,that they want to accelerate the rollout of EV charge points in the UKmeaning businesses

38、will receive larger grants for EV charge point installations.Field,who specialises in creating renewable energy,ranked fourth in our biggest deals of the year.This demonstrates the investment into cleantech thats already taking place.Theres also been significant investment into clean energy generati

39、on,which we speak about in The Sustainable Business Movement.As more people started working remotely,digital security boomed in 2020 and 2021.Since then,investment into digital security has dropped offand is now the lowest its been since 2018,with just 55 fundraisings and 363m raised.Fintech had ano

40、ther downtick,decreasing 37%in the number of deals since The Deal 2022,raising 1.8b compared to 2021s height of 7b.Life Sciences followed suitwith 1.1b invested in 2023 compared to 1.8b in 2022.From looking at our selected sectors,its evident that theres a decline in investment across most industrie

41、s.However,there are some positives.SaaS remains strong,and took a lions share of the deals23%(502 deals).The sector hit a similar percentage in 2022,with 22.3%(650 deals)in the UK,whilst globally the SaaS market also looks strong.According to Statista,the revenue in the SaaS segment will hit$344b by

42、 2027,with an annual growth rate of 7.9%.The year 2022 broke records for AI,with an unprecedented amount invested(2.9b)a trend that hasnt lasted as investment sinks to its lowest since 2018.This might not be owing to less interest in AI,and is more likely a reflection of the current market condition

43、s.In fact,with the rise of generative AI,were likely to see more investment in artificial intelligence.Googles SGE update is at the forefront of changeand other companies may follow suit and incorporate generative AI into their product,or service.Theres a decline in investment across most industries

44、”01 The Deal 2023 Sectors by number of deals4.1Sectors 040050060070020000222023AIFintechSaaSLife SciencesDigital SecurityBlockchainCleantech5023825514 The Deal 2023 The UK Artificial Intelligence Market Potential in a Year of Overall DeclineWhen

45、 The Deal 2022 came out in February 2023,generative AI was still a niche topic.Certainly not something you gathered around a pub table to discuss with your mates,unless you worked in the industry.When OpenAI introduced ChatGPT at the end of November 2022,everything changed.Reuters reported that Chat

46、GPT reached 100m users in just two months.It took TikTok nine months to reach that milestone.Now,youd be hard-pressed to avoid the topiceven if you really wanted to.That there was no dedicated AI section just one year ago shows how the development of this sector has hit lightspeed.It truly boggles t

47、he mind to consider where we might be in one,five,or 50 years from now.Much of the conversation is currently dominated by American companies,but what of the UK AI industry?Where do we sit on the global playing fieldare we change-makers,or are we mere electric sheep,blindly following Silicon Valleys

48、shepherds?In 2023,291 UK AI companies raised 1.4b through 311 announced fundraisings.Thats around 50%fewer than in 2022,when there were 342 fundraisings worth 2.9b.However,11.6%of the overall investment in 2023 was in artificial intelligence companies.In a year that saw a significant downturn in ove

49、rall deals,more than 10%of total investment in the UK AI ecosystem illustrates the opportunities developing on home soil.Of these 291 AI companies,189,around 65%,are London-based.The East of England boasts the second-highest,at 21 companies.This confirms that the capital city remains the top artific

50、ial intelligence hub of the UK,by a mile.Outside of England,Scotland had 11 AI equity investment Elizabeth RyanAlejandro GiacomettiAiAideals,Wales had 6,and Northern Ireland had one.268 of those 291 companies have known founder information.This helps us to determine that 18(6.7%)companies were found

51、ed by an all-female team.A further six companies(2.2%)had a majority-female founding team,while 36(13.4%)had an even split of male and female founders.208(77.6%)AI companies receiving funding in 2023 were founded by either all-male or majority-male teams.To put this into perspective,9%of all compani

52、es that received funding in 2023 were female-founded,so the AI industry is lagging behind in this respect.Tech,in general,has long had a diversity problem,and the boom in AI businesses doesnt appear to buck the trend.Deals aside,there are several camps when it comes to AI.The robots are going to des

53、troy us all is the shoutiest one.AI is just a hype that wont last is the naive one.AI will improve humanity,if we regulate it properly is where we stake our pitch.Where you utter AI,regulation often follows.The AI Safety Summit held late last year brought together nations from around the world to en

54、sure that the benefits of AI technology can be harnessed responsibly for good and for all.The discussion around whether regulation restricts innovation is pertinent,particularly in the AI startup space.Its been said that AI is going to be the first industry to be regulated before its even fully esta

55、blished.How EU and UK regulation develops will have an enormous impact on the AI industry in this country,and how we carve out our seat at the table.With a general election looming,the decisions made at Number 10 will undoubtedly impact AIs ability to flounder or flourish in the UK.Forget government

56、s,regulators,and investors for a minute.What about the human side of AI?Who are the people working with it?What do they think the future holds?I spoke to Alejandro Giacometti,Head of Machine Learning at Beauhurst,to find out some answers.A last little ponder from me.AIs impact on the world is vast,a

57、nd to a large extent,unknowable.Where will we be in 2025?Only time will tell.This is history,peoplewere in it.How AI has transformedAI has drastically evolved over the last few years.It used to be the purview of a relatively small group of tech companies and universities.But in the last few years,th

58、e floodgates have opened,and even more so in the last year with the explosion of large language models and specifically,OpenAIs GPT.There are,of course,many areas where AI has been established as a standard tool for years,particularly as companies have become better at collecting and analysing data.

59、These are well known,even if theyre not associated with the current discourse around AI:forecasting,fraud detection,avoiding churn,customer segmentation,recommendations,translation,and classification of a million different types.There are so many business applications already utilising AI.However,ge

60、nerative AI seems to be radically different.Were seeing AI being used for more ambiguous or creative tasks,like writing blog posts,brainstorming,and image editing,as well as performing ad-hoc analysis of data,synthesising documents,and assisting software programming.This was unthinkable just a few y

61、ears ago.There are older systems that performed these tasks before generative AI,but they required specialised development and high-quality task-specific training data.These new generative AI models seem to be at least adequate at performing these tasks without much context.Another exciting,but pote

62、ntially disruptive,aspect is whos using these tools.Chat interfaces and an array of accessible web-based tools have given many non-technical users access to these models.Theyre now creatively applying them to their jobs in new and interesting ways.Its impressive,the enthusiasm with Q&A:A Conversatio

63、n with Alejandro on the Evolution and Future of AIUK artificial intelligence market 1516 The Deal 2023 which a whole new group of people have adopted this technology.On the other hand,It is not clear whether it presents a challenge to the reliance on knowledge workers or an enhancing tool to make th

64、em more productive.Has automation progressed from taking jobs in factories to coming after us next?Oris it the opposite?Is AI creating a wider divide between specialists and non-specialists?Or,does it allow non-specialists to compete with people who have skills that typically require years of traini

65、ng to master?I suspect that this technology will increasingly become immensely useful in the hands of skilled workers,with the power to make us even more productive.Eventually,knowledge workers who dont know how to leverage AI will have a difficult time trying to catch up.How AI has influenced day-t

66、o-day work Previously,we were always careful to create the simplest possible model that solved the problem.This keeps systems tractable and more easily interpretable.Now,LLMs offer a shortcut.It offers a basis that you can build upon rather than starting from scratch,opening the door to rapid experi

67、mentation.You can get from an idea to decent results very quickly.But it obviously makes systems more complex.They also bring up other issues,such as how to evaluate the results of these experiments in an effective and consistent way.It isnt easy.Its also a fact that everyone has access to the same

68、technology.So,we have to think about what makes Beauhurst specialwe strongly believe that what differentiates our platform is the quality of our data.We are,of course,experimenting with how AI can improve our offering,with the knowledge that our highly curated data is what sets us apart.Quality inpu

69、t equals quality output,right?We have a decade of experience with company data,so we have carefully developed our methodology and processes,and are constantly improving them.We also have a rich set of high-quality hand-curated data that we base our models on.At some level,though,the day-to-day work

70、is the same.We have to understand the data that were using,what our customers need,and how well the different sets of challenges that they have can be solved by machine learning and artificial intelligence.Thats the same as always,but now I have another set of tools that help us to experiment more.T

71、hats exciting.AI regulation&developmentRegulation in AI is something that well be hearing a lot about.As exciting as AI advancements are,there are lots of unresolved issues.Weve also realised some limitations of AI,and addressing these will be a significant focus in the future.We need to consider wh

72、o gets to control this technology and who gets to use it,what kinds of safety mechanisms are applied to them,what data is used to train it,and who owns the intellectual property of training data and the model output.Geography matters quite a bit,as this is an expensive industry.I think regulation,fu

73、nding,and development go hand-in-hand,so you cant just regulate it without getting involved in the innovation.Thats why the government needs to be actively involved in the conversation around AI,so they understand its capabilities and potential risks fully.This involvement should include people in d

74、ecision-making roles who understand the industry and can look after the publics interest.They must be interested in understanding and reacting to the societal impact,as well as having enthusiasm for being part of its development.We cant expect the government to only step in every few years and make

75、impactful decisions;they need to be part of the ongoing development and innovation process,otherwise,theyll always be playing catch-up.However,theres a balance to be struck.Over-regulation could potentially hinder the development of AI.However,if we dont attempt to regulate it,and create our own AI

76、models and businesses in the UK and Europe,we risk defaulting to the American or Chinese view of things.Its not just about access,but also about ensuring that the technology is built to our standards on privacy,intellectual property,and safety.Final thoughtsAI is an exciting field with immense poten

77、tial.Its transforming the way we work and live.There is currently a lot of energy,creativity and enthusiasm.However,its equally important to recognise its risks and limitations and address them.We need to approach AI with a balanced perspective,fostering innovation while safeguarding public interest

78、s.The future of AI holds much promise,and Im excited to see where it takes us.01 The Deal 2023 5 biggest AI deals of 2023Participating funds:European Bank for Reconstruction and Development Venture Capital(EBRD VC),ICONIQ Growth,Index Ventures,Marathon Venture Capital,Pentech Ventures,Visionaries Cl

79、ub,and undisclosed angel investors.Causaly has developed software that uses AI to analyse large datasets for biomedical researchers.Participating funds:Georgian Partners,Insight Partners,and SoftBank Vision Fund 2.Tractable has developed AI software designed to analyse photos of damage from car acci

80、dents and natural disasters for data-based estimations of repair costs.Participating funds:Accel,Firstmark Capital,GV(Google Ventures),Kleiner Perkins,MMC Ventures,and NVIDIA.Synthesia has developed AI technology designed to accurately model the intricate details of the human face in motion for the

81、purposes of enhancing virtual storytelling.Participating funds:ACommitted Capital,JLL Spark,Northzone Ventures,Original Capital,Pictet Private Equity,SoftBank Vision Fund 2,TVC Capital,and undisclosed investors.Infogrid has developed a buildings intelligence platform that analyses Internet of Things

82、(IoT)technology,with the aim of making buildings more efficient and sustainable.Participating funds:BN AMRO Ventures,AlbionVC,BNY Mellon,British Patient Capital,Dawn Capital,Evolution Technology Fund,Government of Singapore Investment Corporation(GIC Private Limited),HSBC Enterprise Fund,and Warburg

83、 Pincus.Quantexa has developed a decision intelligence platform using big data and artificial intelligence,designed to help companies grow with confidence.Head office location:London Date of raise:July 2023 Deal size:45.7mHead office location:London Date of raise:July 2023 Deal size:49.9mHead office

84、 location:London Date of raise:June 2023 Deal size:71.4mHead office location:London Date of raise:April 2023 Deal size:72.4mHead office location:London Date of raise:April 2023 Deal size:104mCausalyTractableSynthesiaInfogridQuantexaUK artificial intelligence market 1718 The Deal 2023 The Sustainable

85、 Business Movement:how are companies making the shift towards Net Zero?Harry WalkerWhat is the UKs approach to the transition to net zero?In 2023,the consumption of fossil fuels in the UK was at its lowest level since 1957.Alongside a reduction in demand for energy produced from sources such as oil

86、and gas comes a more significant contribution from renewable sources such as wind and solar.In the UKs energy mix,renewables now contribute a greater share than oil and gas.This is positive and shows the progress the UK is making towards reducing carbon emissions.Increased investment for those compa

87、nies generating clean energy has also come alongside this.High-growth UK clean energy generation companies received 1.33b in equity investment in 2023,a 40.0%increase from 2022.This comes at a time when the general trend in equity investment in the UK is down,showing that the sector is performing we

88、ll in comparison to the wider ecosystem.The UK government has a policy in place to reach net zero by 2050.This means that greenhouse gas emissions are to be reduced by 100%compared with 1990 levels.As part of this,the government has stated it will continue to increase the use of renewable energy,cla

89、iming that by 2035,it will have achieved fully clean energy.Another action in place is to increase the sale of electric cars by banning the sale of new diesel and petrol cars from 2035.How are companies helping in the transition to net zero?Energy reduction:In the UK,363 high-growth companies specia

90、lise in energy reduction,which has a wide range of applications across various industries for both consumers and businesses.In 2014,183 active companies were operating in this sector,meaning the number of companies has almost doubled over the past 10 years.This industry is dominated by early-stage c

91、ompanies,with over two-thirds of firms in either the seed or venture stage of evolution.Companies secured a record-breaking amount of equity fundraising in 2022,raising 353m via 103 deals.Southwark-based Carbon Clean contributed significantly to this high total,raising 123m through a single fundrais

92、ing in 2022.This year could be seen as an 01 The Deal 2023 outlier for this sector,with 2023 fundraising levels falling closer in line with the figures seen in 2020 and 2021.Despite the drop in equity raised between 2022 and 2023,these companies have already raised more in 2024 than throughout the w

93、hole of 2017.Carbon Clean are one of the leading companies when it comes to equity raised among energy reduction technology companies.Founded in 2009,Carbon Clean provides carbon capture technology and services that help industries to reduce their carbon emissions.The Southwark-based company provide

94、s a full range of services and equipment,aimed at helping companies to achieve net zero.The process can work within existing operations,which,the company claims,can minimise disruptions and maximise cost-effectiveness.The companys carbon capture,utilisation,and storage technologies are designed for

95、hard-to-abate industries such as refineries,steel,and biogas.Since 2012,Carbon Clean has received 151m in equity fundraising via five rounds,in addition to 4.32m in grant funding.Its 2022 fundraising included follow-on investment from CEMEX Ventures,Chevron Technology Ventures,Marubeni,and WAVE Equi

96、ty Partners,as well as new investors,including Saudi-based Aramco Ventures Sustainability Fund.Carbon is not the only greenhouse gas that contributes to climate change.Methane is a potent greenhouse gas and is also responsible for trapping heat in the atmosphere.Bluemethane is a company aiming to ca

97、pture and remove methane from water,which is then converted into bioenergy.Co-founded by Louise Bentata and Nestor Rueda-Vallejo in 2021,Bluemethane has secured 427k in equity fundraising alongside three grants,amounting to 50k.Clean energy production:A further way companies can transition to more s

98、ustainable practices is through using clean energy.In the UK,there are currently 531 high-growth companies working on generating clean energy.These companies range from those developing and enhancing wind turbine technology,to those operating biogas energy plants.Equity investment in these companies

99、 has consistently increased,reaching a peak of 1.33b in 2023.This consistent growth is particularly impressive given that equity investment in the wider high-growth environment fell in 2023,showing investors confidence in the future performance of these companies.Tokamak Energy is developing technol

100、ogy to use the process of fusion to generate clean energy.This involves heating two hydrogen isotopes to form a plasma.At extreme temperatures,these isotopes combine,which releases large amounts of energy.This process produces no greenhouse gases and does not rely on fossil fuels.Since 2011,the Oxfo

101、rd-based company has received 163m in equity fundraising,including a 39.2m investment in 2024.The future of sustainable business The need for the faster adoption of sustainable business practices is reflected in the levels of investment seen in the companies that are aiming to assist in this process

102、.Trends would suggest that these industries will be here to stay,with investment showing resilience to broader downward conditions.This is positive and suggests that the uptake of this technology should continue to quicken in the future.In 2023,we introduced ESG(Environmental,Social and Governance)d

103、ata to the Beauhurst platform,making it easier for you to search for companies that uphold these values.Investment in ESG companies had been steadily increasing until 2022,and now were beginning to see a decrease.In 2023,there were 729 fundraisings for companies that hit one or more of our ESG signa

104、lsand 4.3b invested.This is a 17%decrease in the number of deals from 2022,which might sound significant but it comes as no surprise in light of the economic downturn.As we see more companies value ESG,due to the governments carbon zero by 2050 promise,we could see an uptick in investment here again

105、.ESG DataSustainable business 1920 The Deal 2023 Founder Gender100%80%60%40%20%02000022202383%7%7%83%3%5%7%83%5%6%79%3%8%9%80%3%8%7%79%3%8%7%78%4%9%7%76%5%9%8%75%5%10%7%74%5%9%9%72%6%10%9%Percentage of deals by gender distribution5.1Similar to last year,the majority

106、of deals went to all-male founded companies(72.6%of companies).In 2023,we saw a marginal increase of 0.3%in funding for all-female founded companies and while only a small incline,its still record-breaking support for female entrepreneurs.Weve seen a 1.8%increase in the last decade,meaning with this

107、 continued trajectory,we could be well over 10%by 2033.Companies with majority female founders saw the lowest investment in both number of deals and amount invested,at just 1%.Majority male companies followed at 6%.Our numbers are based only on companies where the gender is known(1670 companies out

108、of 1898).All maleMajority maleEqual splitMajority FemaleAll femaleDeal Sizes020020000222023389248402611Number of megadeals and gigadeals by year6.1Unsurprisingly,weve seen a decline in megadeals(rounds worth 50m-100m)and gigadeals(rou

109、nds worth 100m+)in 2023.There were 11 gigadeals in 2023,and 26 megadeals,meaning gigadeals accounted for just 0.5%of all deals made in 2023,and megadeals were just 1.1%.However,weve still seen an increase in mega and gigadeals compared to 2013(just three megadeals,and no gigadeals)showing that altho

110、ugh there was less investment in the past year,weve still come a long way in the past decade.It opens up the question,where will we be in another 10 years?In theory,on that course,we could see more and more 50m+deals.Deal sizes 21MegadealsGigadeals22 The Deal 2023 Biggest Deals of the YearAtom has d

111、eveloped a digital-exclusive retail banking solution.Quantexa has leveraged big data and artificial intelligence to create a decision intelligence platform.Ascend specialises in biotechnology research,with a focus on cell and gene therapy manufacturing.CMR Surgical designs robotic medical devices fo

112、r surgical procedures and is developing a surgical data platform.Castore creates and markets sportswear for consumers while also providing kits and uniforms to professional athletes and sports teams.Deal date 02/11/2023Location North East Sector Business Banking,FinanceDeal date 03/04/2023Location L

113、ondon Sector Analytics,Insights,ToolsDeal date 09/05/2023Location London Sector Pharmaceuticals,ResearchDeal date 20/09/2023Location London Sector Pharmaceuticals,ResearchDeal date 29/11/2023Location North West Sector RetailAtomQuantexaAscendCMR SurgicalCastore100m104m105m134m145mThese are the bigge

114、st equity investment deals in 2023,ordered from 10 to one:Amount RaisedAmount RaisedAmount RaisedAmount RaisedAmount Raised23 The Deal 2023 Pragmatic produces semiconductors intended for use in mass-market consumer goods and smart packaging applications.Fields primary goal is to construct renewable

115、energy infrastructure,with a particular emphasis on energy storage solutions.SumUp creates payment processes,enabling merchants to handle payments both online and in physical stores.Octopus Group provides a diverse array of services spanning the finance,energy,and real estate sectors.Howden Group Ho

116、ldings manages several enterprises that offer international insurance brokerage and underwriting services.Deal date 06/12/2023Location East of England Sector Electrical ManufacturingDeal date 25/07/2023Location London Sector Clean EnergyDeal date 11/12/2023Location London Sector Mobile Apps,Payments

117、Deal date 18/12/2023Location London Sector Energy,BankingDeal date 24/04/2023Location North West Sector InsurancePragmaticFieldSumUpOctopus GroupHowden 162m200m244m632m1.17bAmount RaisedAmount RaisedAmount RaisedAmount RaisedAmount Raised24 The Deal 2023 Valuations05M10M15M20M25M30M35M40M45M50M55M20

118、000222023Valuations by stage of evolution7.1High-confidence,pre-money valuationsIn our valuations section,we looked at Beauhursts proprietary data on deal valuations.There were 928 announced deals this year for which we could calculate a high-confidence valuation.The

119、 median pre-money,high-confidence valuation for 2023 was 8.5mthis was over 2m higher than in 2022,where the median high-confidence valuation was 6.4m.All pre-money valuationsThe median pre-money valuation for seed companies rose from 2.8m to 2.9m from 2022 to 2023.However,this was the only pre-money

120、 valuation that increasedmost significantly,growth-stage decreased by 37.3%.The median valuation for venture businesses was 8.7m down from 9.2mand established companies saw an 11%decrease in valuation.SeedVentureGrowthEstablished2.9m8.7m15m29mmmmmmmmmmmm01M2M3M4M5M6M7M8M9M20001

121、92020202120222023Valuations by region7.2Regionally,things look more positive,with increases in valuations across all regions apart from Scotland,which only had a minor decline of 2.5%.Its promising to see such high growth levels across the UK.But we must bear in mind that this could be an inflation

122、effect,and that some companies may have used convertible bonds which could inflate or obscure the numbers.The median pre-money valuation for Northern Ireland grew by 46%,followed by Wales increasing by 17%.The median pre-money valuation in London remained the strongest,as weve seen in previous year.

123、In England,excluding London,we saw valuations continue to increase on a steady trajectory.Valuations 25LondonEngland(ex.London)ScotlandWalesNorthern Ireland3.7m5.5m6.2m6.7m8.1m26 The Deal 2023 InvestorsAs always,the top investors of the year were private equity and venture capital firms,participatin

124、g in 871 deals in 2023.This was down from last year but correlated with the number of overall fundraisings and accounted for 40%of all deals.Crowdfunding accounted for 373 rounds,remaining popular.Crowdfunding has gained popularity over the past 10 yearssoaring from just 18.1m in total fundraising v

125、alue generated through crowdfunding in 2013 to 432m raised last year.However,as weve seen throughout this report,2021 was crowdfundings best year,with 811m raised.Angel networks backed 219 rounds in 2023,raising a total of 458m and not all networks announce the deals they back.As we see angel invest

126、ors putting money into high-growth companies,were likely to see a continuation of seed and venture-stage companies taking a higher share of overall deals.However,things could change as new financial thresholds for sophisticated investors and High Net Worth Individuals(HNWIs)were implemented on 31 Ja

127、nuary 2024.HNWIs now need to earn 170k,up from 100k,if they want to become an angel investor.This will make it harder for angels to receive dealflow if they dont meet these criteria,and its a change that will disproportionately affect female investors.The top investors of the year were private equit

128、y and venture capital firms”Investors 27Type of investor by number of deals8.800020000222023PE&VCAngel NetworksCorporateCrowdfundingUniversityCharity or non-profit871028 The Deal 2023 Over and Out:Is the Smart City Industry Dying?Sinc

129、e 2010,smart cities as an industry has raised a staggering 553m through fundraisings.However,with a clear peak in 2021,the trajectory for active companies in this space over time seems to have entered a decline.67%of the companies within this space are now no longer active.Whats going on here?How ca

130、n this trend be explained,when the need for smarter urban environments is only growing?Yesthe smart cities industry is dyingOne contributing factor is the increase in companies cessation of business.In fact,2023 saw the highest number of company cessations in this space to date.Furthermore,fundraisi

131、ng events have been decreasing since 2019,with a temporary increase in 2021,but also remain lower today than ever.Josephine SutheshThe lifecycle of Shepherd,a company which sells a monitoring system to identify events such as leaks,burglaries,and equipment failure,beautifully embodies this decrease

132、in success,the data shows.Shepherd launched in 2015,and between the period of 2017 and 2021,it received a total of 5.9m through equity investment.However,by September 2023,it had ceased tradinga business once full of potential,now dead and no longer contributing to the increased quality of life that

133、 smart city businesses promise to improve.Nothe smart cities industry is not dyingWhat is dying is the term smart city.There are a plethora of think pieces out there about how smart cities as a concept are over.This includes an MIT Technology review warning that by focusing purely on how smart a cit

134、y is,policies risk turning an urban environment into a flashy technology project,without taking into account the genuine livelihoods of its inhabitants.As our urban environments grow,technology cannot be the only focus,but sustainable and inclusive development,too.With this in mind,there are many in

135、dustries receiving investments that contribute towards the overall prosperity of urban spaces,while not falling under the smart city umbrella.Sectors such as artificial intelligence,automation,medtech etc.If we go back to the Beauhurst definition of a smart city,any industry that contributes to mode

136、rnising an urban area could be included in this category.Artificial intelligence raised 111m in fundraising in the first month of 2024 alone,and many of those businesses,whilst not directly working on smart cities,are developing innovations that will improve cities.An illustration relevant to this a

137、rgument would be the development of Integrated Environmental Solutions Limited(IES),a company that provides 3D analysis software and consultancy to clients involved in developing sustainable buildings.Since its incorporation in 1994,IES has been recognised for its innovative approach.It spun out of

138、the University of Strathclyde,has patents to its name,and has raised over 6m in total through fundraising and grants(the most recent secured at the end of 2023).But,would we call IES strictly a smart city company?IES is considered an IT consultancy service,or even a SaaS business.However,what the co

139、mpany does at the core,is support the creation of sustainable buildingswhich is a part of creating a smarter city.ConclusionFollowing the all companies are tech companies adage of the past few years,an enormous quantity of growing firms are working towards solutions that make our cities more efficie

140、nt and sustainablethe term smart cities has simply fallen out of favour.As more and more companies seek to improve their green credentials and technological solutions,industry definitions become increasingly blurred.In the same way that we humans so dislike being put into a box,perhaps its time to e

141、mbrace how todays business sector trends are often multifarious.While the investment world no longer focuses heavily on smart cities as a term,there is certainly no shortage of excitement around mobility,AI,and green energy firms.And have no doubtthese intelligent solutions are making our cities sma

142、rter than ever before.A smart city implements technological solutions to modernise an urban area with the aim of increasing efficiency and improving government services and citizens welfare.This includes digitising and sustainably improving homes,transport,healthcare,water supply,public spaces,and a

143、ll else that concerns the inhabitants and businesses of a municipality.The Beauhurst definition of a smart city is:Smart city industry 29Lily Ruaah Author Lily is a Content Associate and professional writer.She is responsible for content creation at Beauhurst and specialises in both creative and ana

144、lytical writing.Prior to this,she worked in SEO and completed an MA in Creative Writing.Elizabeth Ryan Contributor Liz is the teams Content Lead,with a soft spot for data-driven storytelling.She has 10+years of experience in the startup/scaleup space,including co-founding a digital marketing agency

145、in Berlin.Liz graduated from the University of Portsmouth with a first-class degree in Creative and Media Writing.Josie Suthesh Contributor Josie is a Client Experience Manager,working within the Subscriber Growth team to ensure Beauhurst clients have support when using the platformwhether it be thr

146、ough training,for market research,finding new clients or qualifying leads.Josie holds a BA in Geography from Loughborough University.Illustrations created by Reginald Swinney illustrationBen Hyde Design Ben is a Graphic Designer,creating everything from branding materials to visual content for Beauh

147、ursts blog and long-form reports.He has a keen eye for detail and a passion for good design.Ben holds a BA in Graphic Design from the University of Cumbria.Harry Walker Contributor Harry is a graduate associate in Beauhursts Research&Consultancy team.He conducts data analysis and writes copy for Bea

148、uhurst reports.Before joining Beauhurst,Harry graduated from Loughborough University,where he was awarded a BSc in Economics.Alejandro Giacometti Contributor Alejandro is the head of the Machine Learning team at Beauhurst,which develops algorithms that enrich and connect data about businesses in the UK.He has years of experience in London technology startups and holds a PhD in Image Analysis at UCL.CreditsWant to access this data for yourself?Book a demo01 The Deal 2023