UK Growth Capital Update Q1 2020

According to Moore Kingston Smith's (MKS) research into UK private companies raising between £1 million and £20 million of growth equity capital each, 180 British businesses raised £927 million of growth capital in the first quarter of 2020: an average deal size of £5.15 million.

This representative deal size compares reasonably favourably with the final two quarters of last year, where the average was £5.22 million in Q3 2019 and £5.18 million in Q4. There is a seasonal aspect to transactions completing in the UK – Q1 is normally a quieter quarter following the Christmas and New Year break – but nevertheless Q1 2019 appears to have been a little quieter than normal.

In Q1 2018, MKS recorded a total of 225 deals and in Q1 2019 219 deals, so just 180 deals in Q1 2020 appears to indicate a decline. It may be that this is the early signs of the Coronavirus affecting the growth capital market. Alternatively, it may be that while the UK is in lockdown, reporting of completed transactions takes longer so this might be an incomplete set of data. In their Q2 2020 update, MKS expects to be able to clarify the position.