Venture capital trusts pumped £535m into UK growth companies over the past three years, and every one of the five largest sectors they backed was technology, according to new research from SyndicateRoom.
The money was spread across 398 deals, with the companies raising a combined £1.78bn once funding from other sources is counted in. Software and SaaS attracted the largest share, with 83 deals taking £122.3m. Fintech followed at £56.1m across 45 deals, with cybersecurity, deeptech and AI making up the rest of the top five.
The multiplier is the detail that matters for the tax debate that surrounds VCTs. Richard Stone, chief executive of the Association of Investment Companies, said every £1 invested by VCTs unlocked an additional £2.33 from other sources, producing nearly £1.8bn of total investment in growth companies over the period. “VCTs are now predominantly tech investors, backing the most ambitious British companies in sectors from AI to advanced manufacturing and helping the government deliver its industrial strategy,” Stone said, as Money Marketing reports.
That framing positions VCTs as a bridge in the gap that keeps coming up in UK tech finance: the stage between early funding and the larger rounds that British companies historically seek in the US. The scheme’s rules push capital downmarket in size by design. Investee companies generally have no more than £30m in gross assets, or £35m immediately after the investment, must be no more than seven years old, and employ fewer than 250 people. VCT funding typically arrives when the commercial risk is highest and institutional capital will not touch it.
Two cautions belong in any reader’s head. The leverage figure is an industry claim measuring co-investment, not an independent assessment of whether the underlying companies are thriving, and SyndicateRoom’s dataset covers three years in which AI dominated global venture attention. And VCT shares remain illiquid, tax-motivated investments whose £535m total, while real, is small beside the sums the UK’s tech sector says it needs.
Still, on this evidence the money is finding the sector. Whether the sector can stay in Britain after the cheques clear is the next question.