Fuelling The Rise: The VCs Backing The UK’s Top Startups
Venture capital firms play a vital role in fostering innovation. Not only do they provide startups with the funding they need to develop and launch products and services, but they also grant them access to a network of professionals with the expertise they need to scale.
Typically, VCs are more willing to take risks than traditional lenders. They’re looking for the next big thing, after all – the startup that has the potential to disrupt an industry or create an entirely new one. Below, we’re taking a look at some of the top venture capital firms on the scene today – exploring their investment strategies, portfolios, and track records…
First up is Accel. Headquartered in Palo Alto, this venture capital firm has been making waves in the investment space for the past four decades. Across the pond, its London office has been nurturing seed, early, and growth-stage companies in Europe for over 20 years. In that time, it has made more than 120 impressive investments in the UK alone. Its expertise spans SaaS, fintech, AI, and consumer goods – with notable portfolio companies including Deliveroo, Hopin, and Monzo.
Most recently, Accel made a splash with its investment in Synthesia – a generative AI firm and Capsule client. It took the lead in a $90 million investment, propelling Synthesia to unicorn status. And that’s not all. In August 2022, it also spearheaded a £22.5 million investment in Super Payments – the AI-based payment processing software developer, and another Capsule client.
Not your average venture capital firm, AlbionVC has been on a mission to identify startups changing the game since its inception in 1996. Its strategy focuses on investing in startups that have the potential to disrupt industries and leave a lasting impact, with a specific focus on the software and healthcare industries in the UK. A testament to its ability to spot winners, AlbionVC has already supported four global companies – all of which have achieved valuations exceeding $1 billion.
On to exciting investments, and in January 2023, AlbionVC led a $45 million investment round for Peppy – a digital health app and certified B Corporation. Peppy is transforming the healthcare industry for the better, and AlbionVC recognised its potential. Another trailblazer that has caught its eye is Quantexa, the AI innovator specialising in combatting online fraud and revolutionising customer data management that received a massive $129 million investment from the VC in April 2023. As if that wasn't impressive enough, AlbionVC and Speedinvest recently teamed up to launch the Radia Accelerator. This is an eight-week programme designed specifically to uplift UK-based female founders with product ideas in the B2B software space.
Andreessen Horowitz (a16z)
Meet Andreessen Horowitz, the powerhouse venture capital firm founded in Silicon Valley back in 2009 by dynamic duo Marc Andreessen and Ben Horowitz. Often referred to as ‘a16z’, it has truly made a name for itself across the tech spectrum – investing in everything from early-stage startups to established players. Its diverse portfolio reflects its wide-ranging interests and spans sectors such as healthcare, consumer, crypto, enterprise, fintech, and gaming. a16z is a venture capital firm unafraid to take risks, with a strong track record of getting in early with industry giants like Airbnb.
Exciting times lie ahead as a16z sets its sights on international expansion with plans to open its first London office. It’s also gearing up for their next Crypto Startup School accelerator programme, ready to take place in the UK in spring 2024. Highlights from a16z’s portfolio include a $19 million funding round lead for Sequence, a female-founded fintech startup; a $43 million investment in AI pioneer Gensyn; and a $19 million investment in voice AI startup ElevenLabs.
Next we’re diving into the world of Balderton Capital, which is a seasoned player in the European startup game. A driving force behind Europe’s business ecosystem for more than two decades, Balderton prides itself on its unique ability to recognise what it takes to achieve global success. Having invested in more than 300 companies since 2000, its portfolio is impressive – boasting the likes of Citymapper, Depop, Revolut, Wayve, and Wagestream.
Always at the forefront of exciting investment opportunities, Balderton took the lead in a $29 million Series B funding round for TreasurySpring – a fintech firm with big plans to scale its cash investment platform. In September 2022, Balderton also played a key role in a $78 million investment in renewable energy disruptor Tesseract Energy. It’s strategic investments like these that have helped Balderton earn its reputation as an agent of positive change.
A transatlantic venture capital investor with three decades of experience, Beringea is all about creating long-term success for rapidly growing entrepreneurial companies. Though it generally has a broad focus, it has dug deep into some fascinating areas during its time – from AI, data, and B2B marketplaces to climate tech, femtech, and telehealth. This is a VC that isn’t afraid to explore diverse sectors!
Let’s take a look at some of Beringea’s most recent investments. In January 2023, it invested a whopping £10 million in alcohol-free beer brand Lucky Saint. DASH Water, a B Corp brand and Capsule client, also gained its support. And adding to the list are impressive ventures such as Doctify and Chattermill. Yet another Capsule client, Chattermill is an AI platform that analyses customer feedback at scale. It raised an incredible $26 million in a Series B back in December 2022.
Fuel Ventures also employs a more generalist approach to investing, supporting a wide range of sectors including fintech, SaaS, and e-commerce. The firm was founded in 2014 by Mark Pearson, who is also the founder of MyVoucherCodes. In particular, the VC is interested in companies that are using technology to solve real-world problems and typically invests between £150,000 and £3 million into those with early commercial traction.
In June 2023, Fuel Ventures made headlines with the launch of its new £100 million fund, which will see the VC back 60 startups at pre-seed and seed stage across the majority of sectors. It’s reported that 30-40% of this fund will be channelled into follow-on investments over the course of the next 12 months. To date, Fuel Ventures has backed over 50 pre-seed companies (most notably leading a $65 million round into Heroes, making it one of the largest pre-seed rounds in European history) and over 60 Series A companies.
Geneva, 1996. That’s when Index Ventures made its debut. Soon after, the team established their second home in London, and they’ve never looked back. Their mission? To inject some of Silicon Valley’s dynamic investment spirit into Europe. It’s safe to say they’ve succeeded, too – with Revolut, Etsy, Slack, and Dropbox all among Index Ventures’ impressive portfolio. In November 2022, it launched its second global seed fund – dedicating a massive $300 million to nurturing early-stage startups.
Lately, Index Ventures has been making some big moves in the UK tech space. It led the latest investment round for female-founded digital dermatology startup GetHarley and workplace management software provider Incident.io. They also participated in deals with B Corp healthcare startup Birdie, as well as Capsule client Codat – a fintech platform providing universal APIs for small business data.
Next up is LocalGlobe, a UK-based venture capital firm that’s been operating since 1999. Founders Saul Klein and Robin Klein are a father-and-son duo who have invested in some of Europe’s biggest tech ventures – they count Citymapper, TransferWise, and Zoopla among their impressive partnerships.
LocalGlobe’s most recent activity saw it lead a seed funding round alongside Cavalry Ventures for Kinnu, a UK-based startup working towards bringing generative AI to learning. The round raised £5.1 million in total. Capsule clients Super Payments and Papercup also count the VC among their backers.
Always looking to add to their portfolio, MMC Ventures is a B Corp-certified venture capital firm that invests in early-stage, tech startups. To date, it has backed a number of brands with strong ESG credentials like Gousto, Bloom & Wild, Signal AI, and Copper.
Recently, MMC Ventures participated in Capsule client Synthesia’s $90 million raise and also led alternative payments provider APEXX’s $25 million raise. It’s also supporting Recycleye, an innovator currently developing waste-picking robots to lower the cost of sorting materials. MMC first backed Recycleye in May 2020, and participated in its latest $17 million Series A funding round in February 2023.
Previously Draper Esprit, Molten Ventures is all about furthering Europe’s top tech companies – whether they specialise in deep tech, consumer tech, healthtech, SaaS, or enterprise software.
One of the most active venture capital firms in Europe – with offices in London, Cambridge, and Dublin – Molten Ventures has been involved in some exciting funding rounds of late – including a €5 million investment in employee mental health platform Olivia in June 2023. Another notable investment was the $10 million Series A for Zaptic, a no-code platform based in Manchester that’s revolutionising operations for manufacturers worldwide. And let’s not forget the $30 million Series A for Hadean – a deep tech startup currently building groundbreaking metaverse infrastructure technology – which took place in September 2022. Last but by no means least is the £15 million investment into SaaS data-driven startup Altruistiq. How’s that for a diverse portfolio?
Octopus Ventures is committed to supporting companies that are using technology to create a better tomorrow. B Corp certified, it isn’t afraid to back bold ideas – especially those that put people, community, and the environment first (no surprise then that it’s just one of the VCs we’re working with to reward businesses with discounted premiums if they have good ESG credentials). With an ambitious goal to have invested £10 billion in the industries that are bringing about positive change by 2030, its portfolio includes pet insurance provider Many Pets, femtech Elvie, fashion marketplace Depop, and local sharing app OLIO.
The VC has been busy lately, leading investment rounds for a number of up-and-coming startups. In September 2022, it co-led the $20 million seed funding round into AI startup Unlikely AI. In February 2023, it led the $38 million Series B for Flock – the insurtech using real-time data to enable and incentivise safer driving. In March 2023, it was at the forefront of the $20 million Series B for digital therapy and coaching platform HelloSelf. And in June 2023, Octopus Ventures led the $20 million Series A round for Papercup – the AI speech technology developer.
Our final investor is highly selective. Playfair Capital seeks out companies that are doing things differently than the rest of the pack. Based in London but operating throughout the UK and Europe, it takes a high-conviction, low-volume approach – making between 6 and 8 investments each year and preserving time, capital, and resources to help companies post-investment.
Playfair Capital has backed some great companies including Thought Machine, Orca AI, and Capsule client Omnipresent. What’s more, it has committed to addressing the gender imbalance in venture funding and has delivered over 6,700 mentoring sessions for female founders since 2019. In January 2023, it led a $2.4 million pre-seed round for YASO, a startup helping Western e-commerce brands sell their products in China. It also recently took part in a $17 million investment in Recycleye alongside MMC Ventures – as well as a £9.8 million seed round for Worldr. In March 2023, it announced its third fund at $70 million.
Protecting your investment
The VCs here all have their unique investment strategies and focus, but they’re united by a common goal: to help great ideas succeed and grow.
It’s for this reason that some investors require startups to have certain insurance measures in place before they’ll invest. They want to make sure that the idea they put their money behind has the greatest shot at a healthy return.
For insurance that will give your investors peace of mind, get in touch.