UK biotech fundraising picks up with best quarterly total since 2021
London, United Kingdom, 09/11/2023 - The UK biotech sector secured a substantial total of £563 million in venture capital and public financing during the three months spanning June to August 2023, data published today by the UK BioIndustry Association (BIA) and Clarivate shows.
This represents a 48% increase from the previous quarter's takings and consistent quarter-on-quarter growth throughout the year making this the most robust period since the sector’s peak in 2021. This is in line with the surge in fundraising activity among European companies that more than doubled their fundraisings this quarter, while US companies saw a 21% decline across all fundraisings.
While the dearth of public market launches continues to present challenges for European companies, including UK biotech companies, public follow-on financings were responsible for the increased investment this quarter, with UK companies raising a total of £315 million after a year of subdued activity.
Venture capital funding amounted to £249 million, representing a 26% decline compared to the previous quarter but still a 35% increase from the same period last year. Although fewer deals took place, early-stage companies were well-supported, with many deals falling into seed and series A categories.
Steve Bates OBE, CEO of the BIA, said:
"Against a difficult economic backdrop, the quality of the science and management teams in UK biotech is continuing to attract domestic and foreign investors. Strong seed and Series A dealmaking bodes well for company formation through 2023 and UK biotechs remain the European leaders for total venture capital raised. With the Jefferies London Healthcare conference becoming the pre-eminent global life sciences financing conference, all eyes are on the UK, and it is great to see us demonstrating success.
New initiatives stemming from the Mansion House Agreement help to give confidence for the UK financing ecosystem, with pension savers well placed to benefit if the pensions industry engages with this UK success story. Globally, 2023 remains challenging for biotech, with the IPO window still closed. However, this quarter's total of £563 million is the highest we've seen since the record-breaking year of 2021 and is an encouraging sign that the global funding malaise is starting to recede."
Mike Ward,Global Head of Life Sciences & Healthcare Thought Leadership, Clarivate, said:
"With world events such as wars in Ukraine and the Middle East and geopolitical tensions and the macroeconomic headwinds of persistent high-interest rates, it is hardly surprising that there has been a flight from riskier asset classes. Even though big pharma is sitting on big cash piles, and venture capitalists have billions in dry powder, there has been a reluctance to deploy the capital. Consequently, across the globe, biotech companies have struggled to raise new money. On a more positive note, we are seeing more enthusiasm for licensing and M&A deals as big pharma looks to replenish its pipelines.”
The encouraging report follows recent efforts to unlock capital from pension funds to further boost investment into high-growth and innovative companies propelling the UK's life sciences sector to surpass last year's total fundraisings.
In his Autumn Statement, Chancellor Jeremy Hunt is expected to unveil a government initiative aimed at turbocharging pension funds' investments in high-growth private companies, one of the key goals of the Mansion House compact launched earlier this year.
Notes to Editors
- Please contact Martin Turner on 07850 518 075 and mturner@bioindustry.org for more information
- The full report can be found at https://biotechfinance.org/q3/
- For more information on the Mansion House reforms and what they mean for life sciences, see this BIA blog and government press release
- For examples of leading UK life science and biotech companies see this PwC report
About the BioIndustry Association (BIA)
The BioIndustry Association (BIA) is the voice of the innovative life sciences and biotech industry, enabling and connecting the UK ecosystem so that businesses can start, grow, and deliver world-changing innovation.
Helping biotech and life sciences sector to influence, connect and save. www.bioindustry.org