Fundraising Report 2024

The United Kingdom (UK) venture capital market in 2024 demonstrated resilience in the face of global economic uncertainty. As global markets slowly recover, the UK has emerged as a hub for driving innovation with several sectors leading the charge.

Last year, the market was characterised by cautious investor sentiment, a reflection of the economic uncertainties that included high interest rates and a subdued stock market. However, 2024 has painted a different picture, one where we've witnessed a robust resurgence in venture capital activity and an overall increase in investor confidence.

• Pitchbook reported that approximately one-third of the venture capital funds raised in Europe, amounting to $6.7 billion, were secured through mega-funds⁽¹⁾
• According to data from Crunchbase, the artificial intelligence sector led in terms of investment during the third quarter, with start-ups in this field securing nearly $19 billion. This represents 28% of the total venture capital funding⁽²⁾
• The Bank of England's interest rate cuts have injected more liquidity into the market, facilitating increased investment activity⁽³⁾
• Investors to double down on sustainability and impact investing⁽⁴⁾

¹ Here are the megafunds defying Europe’s VC fundraising dip - PitchBook

² Global Funding Slowed In Q3, Even As AI Continued To Lead

³ Interest rates: Bank of England cuts interest rates to 4.75%, in second reduction this year - BBC News

⁴ https://www.statista.com/topics/12683/venture-capital-in-the-uk/#editorsPicks

 

"Our firm was at the forefront of the fundraising market in 2024, successfully advising on 181 deals across a diverse range of sectors. Our expertise has been particularly impactful in the Health, Digital, and Tech sectors, where we’ve seen a strong presence and alignment with the broader market trends.

The total capital raised through these deals has reached £1,275,797,968, an impressive figure, especially when viewed against the challenging backdrop of the previous year. Even in sectors like Healthtech, where the market has faced difficulties, we’ve made significant contributions on pivotal deals.

A consistent deal flow and the substantial funds we’ve helped raise demonstrate the exceptional quality of our service offering to clients. We are well-equipped to seize the investment opportunities that continue to emerge."

Attilio Leccisotti, Partner in the Emerging Companies team

Deals:
181 transactions

On average more than
1 deal every other
day

Sectors:
Technology and AI 23%
Health/Medtech 16%
Digital 14%

 

Total raise of
£1,275,797,968

Commenting on our findings, Patrick Neall, Associate in the Emerging Companies team said: 
Our clients all do amazing work, and it is great to be able to support them. These figures are an indication of the ever-growing strength of the corporate department at Mishcon and is just a glimpse of the value we can provide to early-stage companies

We advised on 181 funding rounds.

On average, we closed a total of 15 funding rounds per month, contributing to the deployment of over £1.2 billion in funding.

The most active month for deal volume was recorded in March with 24 completed deals, representing a 9% increase when compared to the same period last year.

Deal activity experienced significant month-on-month fluctuations, with the volume in the latter half of the year being 10% higher than in the first half. This reflects the view that investors have been approaching opportunities with more diligence and selectivity in order to mitigate the risks posed by high interest rates and unpredictable public markets.

Not only has deal volume increased by 28% year-on-year, deal value increased significantly with a 177% rise in funds deployed, indicating a robust year for our deal flow.

The largest amount raised in a single transaction was in January when acting on a series C deal with Wayve.

Commenting on 2024, Geoff Dragon, Partner in the Emerging Companies team said:
The venture capital environment in 2024 continued to be challenging for many companies looking to raise funds however, there were signs of hope compared to recent years. After a period of market correction, investors appear to be regaining confidence in deploying their capital. While investors are still being more cautious in terms of when to deploy capital, when they do invest, especially in companies able to demonstrate a solid scalable revenue stream, opportunities for significant venture capital investment are growing.

Mishcon de Reya recently advised self-driving car technology startup Wayve on its $1.05 billion Series C investment round. This round was spearheaded by SoftBank Group and saw contributions from new investor NVIDIA, as well as continued support from existing investor Microsoft, and it is the largest known investment in an AI company in Europe to date.

Wayve specialises in developing AI models for autonomous driving, creating a "robot brain" that learns from and interacts with real-world environments. Its Embodied AI technology is designed to prioritise safety, delivering natural and secure driving performance. It addresses the challenge of handling rare, unexpected, or edge-case scenarios that are not frequently encountered during training, by generalising learned driving skills to handle unexpected scenarios without prior training. Wayve’s self-supervised learning approach supports efficient, large-scale learning, enabling the AI to adapt smoothly to new vehicles and environments across different locations.

The funds are earmarked to bolster Wayve's strategic initiative to advance autonomous mobility, leveraging the power of artificial intelligence. Mishcon de Reya's Emerging Companies team was led by Chris Keen, with support from Kunal Sankhla, Geoff Dragon, Charlotte Lomas and Ege Sever.

Speaking on this landmark deal, Chris Keen, Partner in the Emerging Companies team commented:
Seven years ago, I met Alex Kendall at the Taylor Vinters office in Cambridge to hear about his vision for an autonomous vehicles and AI company. Since then, we’ve worked together closely. This deal is the largest AI fundraising by a European company and one of the biggest venture financings ever in the UK. Collaborating with Alex, Charlie, and Jai on this has been an honour. Late nights and weekends were many, but the scale of their achievement makes it all worthwhile.

We advised Sokin, a leading global FinTech firm specialising in international payments, on a successful multi-million dollar transaction which resulted in Morgan Stanley acquiring a stake in Sokin. The transaction was led by Morgan Stanley Expansion Capital with further investments being made by prominent players in the payments market, including Aurum Partners, Gary Marino, ex-chief commercial officer at PayPal and Mark Britto, former CPO of PayPal.

Sokin, established in 2019, provides over 500 businesses, including in freight, logistics and Premier League football clubs, with multi-currency accounts to manage their international receivables and payments.

The investment from Morgan Stanley follows a trend of major financial institutions increasing their stakes in European FinTechs, signalling a growing interest and confidence in the sector. Sokin plans to utilise the capital to expand its global reach, with a particular focus on growth in Asia, South America and Africa. Currently, around 45% of Sokin's clients are based in North America, indicating a strong foundation for further international development.

We advised Sokin on all UK elements of the transaction. The team was led by Hayley Cross, London-based Partner in our Emerging Companies team, and included Kate Morter (Managing Associate) and Emma O'Rourke (Associate), as well as support from across the firm, including from our specialist Employment Incentives team.

Vroon Modgill, Sokin’s CEO commented:
The investment from Morgan Stanley is a testament to the product and team that have already been built at Sokin, but we very much see this as the start of what’s to come. With fantastic partners like this, including Mishcon de Reya, we expect to achieve great things in the coming years.

Partner in the Emerging Companies team, Hayley Cross commented
We are absolutely delighted to have completed this transaction for the Sokin team. Sokin is an incredibly exciting company led by a fantastic management team with an endless ambition for growth. The calibre of investors that they have attracted is testament to their achievements so far and their future growth plans. I am very happy for everyone involved and look forward to continuing to work with the Sokin team as they grow.

We advised HutanBio, a Cambridge-based biotechnology company focused on developing sustainable biofuels, during its recent £3 million seed funding round. The round saw the UK Innovation and Science Seed Fund (UKI2S) join the lead investor, Clean Growth Fund, in backing HutanBio's innovative approach to tackling climate change through advanced biology.

HutanBio's HBx Biofuel is a 'Drop In' low carbon fuel solution aimed at decarbonising long-distance transportation, particularly in the Maritime and Aviation sectors. The investment from UKI2S, managed by Future Planet Capital (Ventures) Limited, reflects the growing interest in technologies that support the transition to NetZero emissions.

The investment round, which included participation from Mishcon de Reya, will enable HutanBio to continue the development of its HBx biofuel platform, which has been developed to thrive in high salinity conditions and is grown in enclosed photobioreactors on non-arable land. This approach avoids the use of prime agricultural land and reduces deforestation incentives.

Adam Bradley, Partner in the Corporate team, who led the Mishcon team on the deal, commented: 
It's rewarding to provide legal advice to companies like HutanBio, which are at the forefront of developing technologies that have the potential to make a significant environmental impact. We are pleased to have supported HutanBio through this funding round and look forward to seeing the positive changes their work will bring.

Oliver Sexton, Investment Director at UKI2S, stated: 
UKI2S is committed to investing in technologies that have a significant positive environmental impact. HutanBio's innovative use of biology for low carbon fuel production aligns perfectly with our vision. We believe in its mission to make sustainable fuels and are excited to support its efforts in the battle against climate change.

Paul Beastall, CEO of HutanBio, said: 
We are delighted to have secured funding from UK12S. This investment is not just a financial boost, but a strong vote of confidence in our mission to harness advanced biology to produce low carbon fuels. Bolstered by this additional investment, we can accelerate our strategic growth plans and bring our innovative solutions to market quicker.

We advised FluoRok, an Oxford-based spinout company, on its fundraising round of £7.7million. The investment will accelerate the scale-up, manufacture and commercialisation of FluoRok's novel fluorochemical reagents and battery electrolyte salts. 

The funding round was led by BGF alongside Green Generation Fund, with contributions from Volta Energy Technologies, and the continued support from existing investors. 

FluoRok, founded in 2022 as a spin-out from the University of Oxford, has developed a patented method for producing fluorochemicals. These chemicals are essential for various industries, including energy, healthcare, and food supply, and represent a global market worth $24 billion. FluoRok's technology offers a safe and sustainable alternative to the traditional, carbon-intensive methods centred around hydrogen fluoride, a highly toxic and hazardous chemical. 

The investment will enable FluoRok to expand its team and production facilities, particularly for the initial supply of its fluorinating reagents and lithium hexafluorophosphate, a crucial component for lithium-ion batteries. 

Mishcon de Reya's team, led by Nicola McConville (Partner) and Kunal Sankhla (Managing Associate), provided legal advice and support throughout the fundraising process, ensuring a smooth and successful transaction for FluoRok and its investors. 

Nicola McConville and Kunal Sankhla of Mishcon de Reya commented:
We are thrilled to have supported FluoRok in this significant phase of their growth. Their approach to fluorochemicals not only represents a leap forward in sustainable manufacturing but also positions them at the forefront of the industry. We look forward to supporting the company and its talented team in the years to come.

We advised London-based space research and technology company Lodestar Space on its recent $2.5 million pre-seed funding round.  

The investment round was co-led by deep tech venture capital funds Inflection.xyz and Lunar Ventures. The round also saw participation from individual investors, including Charlie Songhurst, Zehan Wang and Mehdi Ghissassi, as well as institutional support from the UK Space Agency through non-dilutive funding. 

Founded in 2023 by aerospace engineers Thomas Santini and Neil Buchanan, Lodestar Space is developing capabilities for physical interaction with space assets that underpin both national security missions as well as the future of commerce beyond Earth. 

The team has recently completed a successful zero-gravity test in collaboration with the Aurelia Institute and MIT and is targeting an in-orbit demonstration with an uncooperative space asset by the end of 2025. 

Partner, Chris Keen and Managing Associate, Gayle Hawke in the Emerging Companies team, commented:
We are very pleased to have had the opportunity to advise Lodestar Space on this key funding round. Their commitment to advancing space technology not only paves the way for future innovation but also plays a critical role in the protection and build-up of our space infrastructure. It's an exciting time for the industry, and we are proud to support Lodestar Space as they embark on this next chapter

We advised Relation, a leading biotechnology company, on the legal aspects of two strategic collaborations with GSK aimed at advancing the development of novel therapeutics for fibrotic diseases and osteoarthritis. These conditions, which affect millions of people worldwide, currently have few treatments that address their root causes. 

Under the terms of both agreements, Relation will receive an upfront payment from GSK of $45 million, which comprises an equity investment of $15 million. Relation will also be eligible for success-based collaboration payments of up to $63 million, as well as potential preclinical, development, and commercial milestone payments of up to $200 million per target, and tiered royalties on net sales of products. 

Relation will lead observational studies to generate two unique functional disease data sets, and Relation’s Lab-in-the-Loop platform will analyse this data to discover novel disease targets. Relation will apply its platform to a number of related fibrotic conditions and osteoarthritis, while GSK will have worldwide development and commercialisation rights to any resulting targets. 

The Mishcon de Reya team, led by Patrick Farrant, provided legal support throughout the negotiation and execution of these agreements, with contributions from David Rainford, Sophie Wood, James Boyle, Anna Sloan, Hugo Christie, Kunal Sankhla, Gwen Ballin-Reeler, and Hayley Cross. 

Patrick Farrant, Innovation Partner at Mishcon de Reya, commented: 
Supporting Relation on the legal structuring of these collaborations has been a significant undertaking, showcasing our firm’s expertise in advising on life sciences transactions. These agreements highlight the groundbreaking science that Relation is delivering, and we are proud to have played a role in enabling their strategic partnerships. Such collaborations demonstrate the transformative potential of technology-driven platforms in advancing drug discovery and development.

Benjamin Swerner, COO at Relation, added: 
Great deals require great science, great ambition and great partners. With Mishcon on our team, we have been able to move swiftly and with purpose.

Investments that we were involved in during 2024 totalled
£1,275,797,968

1,275,797,968 of fundraisings and investments represents a huge hike in funds deployed, over 177% higher when compared to what we achieved in 2023.

We take this as a clear and positive sign that confidence is returning to the UK market, as we navigate our way out of the global economic challenges and interest rate rises.

Looking at some of the standout figures from last year: January (typically a quiet month) saw us hit the ground running with £773 million raised; July saw over £60 million raised (up by 72% from 2023); and in August we saw an impressive £69 million raised (a 31% rise from 2023). So, lots of reason for optimism!

And it's not just the amounts which are noteworthy – the sheer number of deals we worked on and the breadth of the sectors in which the businesses operate paint a picture of a varied and dynamic market. March, for example, was a hive of activity with 24 deals, indicating both that things are getting back on track and that investors are becoming more strategic and selective in the businesses they are choosing.

Given everything we've seen in 2024, we're approaching the new year with high hopes and a lot of positivity that 2025 will be another impressive year for fundraising.

Andrew Wolfin, Partner in the Emerging Companies team

The Technology and AI sector continued to lead in 2024 with 42 deals, representing 23% of our total deals. The Health/Medtech sector also demonstrated considerable activity, with 29 deals accounting for 16% of the total deals.

The Digital sector maintained a notable presence, with 26 deals making up 14.77% of the total, while we completed 18 deals in the Enterprise sector, contributing to 10% of the total number of deals.

These figures reflect the sustained investor interest in sectors that are at the forefront of innovation and societal impact. As expected, AI-based companies are attracting the most investment both in terms of overall activity and value - something that is reflected by wider industry trends. However, it’s positive to see sectors other than AI showing increasing levels of activity, hopefully demonstrating that the venture capital space isn't over reliant on one technology trend. In particular, we observed a significant (11.5%) rise in Medtech activity, which represents a substantial increase compared to the levels recorded in 2023.

Alexa Hamilton, Managing Associate in the Emerging Companies team

Our client base in 2024 was predominantly UK-based, with a notable concentration in the Golden Triangle. London led with 89 deals, while Cambridge and Oxford contributed with an almost matched amount of deals, respectively.

The rest of the UK also showed a healthy level of activity with 36 deals. We facilitated six deals from EU and US-based clients combined, indicating potential areas for expansion.

The Technology and AI sector was particularly strong in London, while Cambridge and Oxford had a strong focus on Health and Medtech.

Comparing year-on-year trends, there was a marked increase in the number of deals for London-based clients, while the rest of the UK  activity remained relatively stable. 

We have observed the encouraging trend of renewed investment in UK university spin-outs. Recent data from Beauhurst and Parkwalk Advisors reveals a revival in funding, with £1 billion invested in the first half of 2024, a rebound from the previous year's figures. Our close connections with various universities and research parks across the UK, particularly in Cambridge and Oxford, position us to play a pivotal role in this resurgence.

The Labour Party's commitment to creating a favourable environment for start-ups is evident, with Chancellor Rachel Reeves supporting the Independent Review of university spin-outs. The Review, conducted by Professor Irene Tracey and Dr. Andrew Williamson, underscores the importance of strategic partnerships and enhanced financial access for these ventures.

• Innovation partnerships
  The Labour Party's intention to forge stronger relationships between universities, the private sector, and the Government is set to reduce bureaucratic barriers, potentially benefiting spin-outs and fostering wider industry collaboration.
• Life sciences investment
  A £10 billion investment in life sciences is on the cards, aiming to propel the UK to the forefront of pharmaceutical and life sciences research and development.
• Industrial strategy 
  The Labour Party's strategy includes a comprehensive AI sector plan and a new national data library, with a commitment to 10-year budgets for key innovation institutions, likely involving universities.
  
  As the new Government takes shape, including the strategic appointment of Sir Patrick Vallance as Minister of State for Science, we at Mishcon de Reya are optimistic about the future of the UK's research and development sector. We are ready to leverage our established relationships with leading academic institutions to support the advancement and growth of this vital area.

"Last year we predicted strong M&A activity for venture-backed businesses, and we were proven to be correct. We had anticipated that this increased exit activity would reflect a decrease in investment, particularly at later stages. However, despite a cautious first half of 2024 (albeit stronger than 2023), investors have shown significant signs of optimism in the second half of the year and investment activity has remained steady over the full period when compared to the previous year.

A slower market over the last couple of years, following bumper years of fundraising, sees investors keen to deploy remaining funds and competition for investment in popular areas such as generative AI, healthcare and financial services, is gaining momentum. With the world increasingly focused on sustainability, businesses in this area are also seeing increased interest.

M&A activity continues to be strong, and we work closely with investors to identify ways to support their portfolio companies as they steer towards an exit, ensuring the process is as smooth as possible and optimising valuation.

Geographically, although most VC investment for UK companies comes from Europe, the US remains a significant contributor to the UK venture capital market and our US VC capability enables us to seamlessly advise on these investments. Within the UK, although London remains the dominant hub of investment, Cambridge and Oxford represent significant proportions of the UK VC market and have delivered notable growth over 2024 as the investment ecosystem in these regions support many of Europe's most promising entrepreneurs and knowledge intensive businesses."

On Cambridge, Charlie Fletcher, Partner in the Corporate team, commented:

Cambridge maintained its reputation as a globally renowned hub for innovation. This year Health and Medtech attracted significant investment, hosting half of our wider Health and Medtech deals. The city's strong academic foundations, entrepreneurial community and talent pool continue to support a thriving ecosystem for life sciences and technology.

Speaking on Oxford, Nicola McConville, Partner in the Corporate team, commented:

Oxford's diverse sector engagement is evident, with a balanced distribution of deals across Life Science, Deeptech, Cleantech, and other emerging sectors. The city's rich academic and research environment fosters a conducive atmosphere for growth and investment.

Hayley Cross, Partner in the Corporate team, commented on the landscape in London, saying:

London continues to be exciting and remains at the heart of venture capital in the UK. We completed 89 deals in London across all the key sectors in venture, highlighting its status as a versatile and attractive location for investors. Support for venture-backed businesses is at its best in London. With access to networking events, communities, conferences and accelerators, together with its connection to the rest of Europe, the US and beyond emerging companies in London continue to draw significant capital, particularly in Digital, Technology and AI.

"The M&A landscape in 2024 has been marked by an initially tentative period followed by resilience and then growth. Despite the challenges posed by the global economic climate and regulatory changes, businesses have been leveraging M&A to drive their growth and expansion plans. From a quiet start, the market has seen a steady uptick in activity, with an increasing number of businesses seeking to grow through strategic acquisitions.

Our M&A team has been involved in a significant amount of this activity, advising on a wide range of transactions, from small private deals to large public takeovers. We understand the complexities of these transactions and provide tailored advice to help our clients achieve their strategic objectives. With interest rates moving in the right direction, increased levels of private capital looking for an investment home and the rise in new-tech and AI opportunities, we expect to see an increase in transactional activity through 2025."

Kevin McCarthy, Partner and Chair of the Corporate team

"The prediction we made at the end of a challenging 2023 that there would be increased transactional activity in the Private Equity (PE) market in 2024 proved accurate.

2024 has seen a sustained increase in levels of PE transactional activity with the Mishcon PE team acting on a number of high-profile deals. Notable examples include advising the management team of Care UK on the exit by Bridgepoint and advising the management team of Corndel on its sale to Galileo Global Education (with the Mishcon PE team previously acting for the management team on its sale to THI in December 2020).

The Autumn Budget brought smaller than anticipated increases to CGT rates and so confidence remains that transactional activity will continue to increase throughout 2025. However, caution remains due to the expectation for interest rates to reduce at a slower rate than previously anticipated and for businesses to manage significant increases in National Insurance."

James Paterson, Partner in the Private Equity team

In March 2024, we introduced Mishcon PLUS, a first-of-its-kind client co-investment initiative following the merger of Mishcon de Reya and Taylor Vinters. The programme leverages our combined access to high-potential, fast-growth businesses across the UK. Through an objective, data-driven approach, fundraising clients can secure up to £100,000 as part of their current or future fundraising efforts. 

Since its launch, eight companies across the London, Cambridge and Oxford ecosystems have been approved for the scheme. 

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Working with Mishcon has far exceeded our expectations of a law firm. It's been fantastic to have the investment from Mishcon PLUS and the investment process itself was incredibly smooth. They've been kind enough to open their network to us, helping the business progress, and of course having them as investors means that we know that they are in our corner for the years to come! It's incredibly easy to work with Mishcon in a way that I haven't seen with other law firms.

Simon Toller CFO and Co-Founder of ekko

We thought the Mishcon PLUS investment proposition was both interesting and supportive. The fact that the Firm made a positive financial commitment to our growth gave our other investors further reassurance.  “The process itself was as straightforward and positive as it could have been. Mishcon’s patience was wonderful for me as I didn't have to worry about keeping you onside during a complex closing process. Genuinely it was a pleasurable process. The support we had from the entire Mishcon team was wonderful, and the entire team clearly had our interests at heart.

Dan Thomas, CEO, Quantum Fabrix

It has been such a privilege to work with the PLUS team and get to know the wider Mishcon family. From benefitting from a wide source of expertise (legals, commercials, fundraising, growth, PR), a wealth of invaluable resources for busy founders, all the way to working with seasoned investment professionals - the Mishcon team provides it all. PLUS has been a huge source of help and considered input - they really know and understand founders - and can therefore support them from MVP to scaling in a really cohesive manner!

Bianca Rangecroft, Founder & CEO, Whering

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