What's happening to venture funding?
New study shows dip in regional VC deals?
Hello Rainmakers,
Should we be worried?
Venture capital deals dipped at the back end of last year.
This is your free Friday taster email for all the curious free subscribers out there who don’t quite know what they’re missing.
But also a pick of the crop from different deals being done around the country, selected by our team of journalists from TheBusinessDesk.com.
Rainmakers is a reader-supported publication. Subscribers get two unique pieces a week and full access to our back catalogue of investigations, scoops, and insights. These include updates from columnist The Secret Investor and interviews with entrepreneurs (like this one), as well as leaders from VC and PE investors like Mercia and LDC.
First though, some news about a great new feature of our Rainmakers conference.
New for 2025, we’re adding interactive workshops to the Rainmakers Conference which is to be held at Emirates Old Trafford, Manchester, on Wednesday 26 March, 2025.
There are four workshops, all are designed to be interactive, ensuring you leave with tangible takeaways.
Over 300 Rainmakers have already booked, we’re expecting another sell-out event so don’t wait to grab your tickets.
The four workshops are:
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🔸 Head Straight for the Exit: preparing your technology investment from day one
Attendees will learn how to strategically leverage technology to enhance exit readiness, improve valuation, and build a foundation for sustainable growth beyond the exit.
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🔸 Growth Credit in the North – An ‘untapped’ capital source?
An introduction to Growth Credit as an asset class, followed by a discussion around where it has worked well and where it can be used to increase growth and minimise shareholder dilution.
Brought to you by PHD Industrial Holdings
🔸 An Alternative to Trade Sale or Private Equity – An Interactive Session with PHD Industrial Holdings
An interactive session exploring how PHD Industrial Holdings’ model supported the founders of Technikraft, a Goole-based speciality chemical manufacturer, in their transition from business owners to minority shareholders and non-executive directors.
Brought to you by Twisted Loop
🔸 Deal or No Deal: How to Leverage AI in Today’s M&A Market
A short presentation highlighting key data and AI trends, followed by an interactive session to give a taste of how AI can be practically applied in the world of M&A.
With experience in scaling and exiting multiple high growth businesses, Jon & Alice are perfectly placed to talk you through the next steps of your AI journey.
Click here to view further details on each workshop.
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This week subscribers would have enjoyed the latest taken from our Secret Investor.
I wouldn’t say that’s quite how it’s felt for me. But… it does feel more positive than the second half of 2024, so that’s something. If I was to sum up the mood music I’m hearing right now, I would say that it is ABSOLUTELY NOT… “that there’s a huge backlog of top quality deals that advisers have held back to January.”
BUT IT COULD BE… “with so many deals on hold for the second half of 2024 advisers have now picked the pens back up and we will likely see a few things spring into action in a month or two’s time”.
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What’s going on with venture investing?
A total of £74.4m of venture capital (VC) investment was raised by North West businesses in the fourth quarter of 2024, between October and December – down 70% from £251.4m in the previous quarter, according to KPMG’s latest Venture Pulse report.
While overall funding fell, the volume of transactions increased quarter-on-quarter with 28 transactions completed in Q4, up from 26 in Q3.
Businesses in Manchester contributed the largest share of funding raised in 2024, supported by some large investments in life sciences start-ups.
This includes an £80.3m funding round into Manchester-based biotech drug developer F2G in Q3, and £34.1m from an early-stage VC investment into biotech firm Ascend in Q4.
The North West also saw ample investment into its IT businesses with 13 firms raising a total of £25.4m. This comes after the region’s businesses cited AI, cyber security and digital transformation as key focuses for 2025.
The sustained levels of VC investment reflect cautious optimism among business owners, with recent data from KPMG’s KPE Barometer revealing that more than a quarter of the North West’s private business owners see venture capital as a means to finance business diversification this year.
Nationally, the UK attracted the highest level of VC investment in Europe in 2024, following a strong end to the year.
The UK raised a total of £15.5bn VC investment after funding in Q4 jumped by more than a third from £3.1bn to £4.4bn.
This was driven largely by $1.3bn raised by Greenscale, a London-based AI data centre firm.
A total of 569 businesses made up the £4.4bn investment, including £409m raised by Insider and £303m raised by Lighthouse.
These results come just weeks after KPMG published its first ever KPE Barometer, which revealed that more than 90% of Britain’s private business owners are confident of growth in 2025.
Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, said: “After a difficult Q3, it’s great to see the UK end the year as the top destination in Europe for VC investment.
“The strong rebound in Q4 has boosted optimism among investors looking ahead to the rest of 2025, with AI likely to remain at the forefront of those looking to invest.
“However, the impact of both global and domestic events such as the UK Budget measures and the new US President taking office, could still contribute to a level of investor caution.”
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On Thursday we brought subscribers a hot take on a green deal completed in Birmingham.
We all know sustainability needs to be high on the agenda, but the journey to achieving it is challenging.
Investors are increasingly prioritising sustainable companies, pushing businesses to align with greener practices. However, retrofitting your operations is a costly task and in a difficult economic climate, many look to defer initiatives in favour of immediate survival.
Yet, innovation will always emerge from adversity.
Take Domna - a start-up which secured £70m of backing from private equity investor Leon Capital last week.
Founded by ex-McKinsey partner Anna Moore, ex-British Land strategy executive Chenai Gondo and Khalim Conn-Kowlessar, Domna’s stated mission is to make every home in Britain energy efficient.
Many of Domna’s clients recognise the need to retrofit their portfolios but struggle with where to start. They face challenges in sourcing the right tradespeople, managing costs, and understanding the impact on valuations and returns. Domna simplifies this process by using its retrofit software to assess portfolios in minutes using just addresses. Accredited retrofit assessors then visit sites to design fully costed retrofit programmes.
The full story is available here.
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We’ve been saying for some time that software deals are big news.
QBS technology acquired a German distributor this week for an estimated £40m.
Cheshire-based software business QBS expects to reach its billion dollar a year sales threshold earlier than excepted after completing the purchase of distributor Prianto Group which owns twelve companies across ten countries.
Chief executive Dave Stevinson, who won CEO of the year at the 2024 Business of the Year Awards, told TheBusinessDesk.com that the deal consolidates the market position of both businesses in the enterprise software delivery and value added distribution market in Europe.
“This deal helps us expand our footprint deeper into Germany and France in particular. As well as gaining footholds in 5 major European cities,” he said.
“I also have 170 new colleagues joining the QBS team and by carefully blending our people investment with software engineering – we are perfectly poised to hit that billion dollars a lot earlier than 2030! – actually I am thinking should we raise that billion dollar target?”
The amount paid wasn’t disclosed, but typically businesses in the software distribution sector are valued at multiples of between seven and eight times profits, which would price this deal at around £40m.
The acquisition will create a market-leading entity with reoccurring revenues approaching $600 million and a combined workforce exceeding 400 professionals across 12 geographies.
This transaction will also be QBS’s fourteenth over the last six years and Stevinson said it “signifies a milestone” in the expansion of QBS Software.
A Hull-based software business has raised £100,000 from NPIF II – Mercia Debt Finance, which is managed by Mercia Debt as part of The Northern Powerhouse Investment Fund II (NPIF II), to support its growing workload.
Think360 has secured over £1m worth of new contracts in the past few weeks and has over £4m of other potential new business in the pipeline.
The funding will provide additional working capital to enable it to take on more projects and expand its team with the creation of three new jobs.
Think360 was established in 2018 by Martin Lauer, who is also CEO of The One Point, a Hull-based IT and telecoms business, and initially delivered bespoke software projects.
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