The Q3 2024 Equity Market Update
Methodology
Data for this article was finalised on 28/10/2024
To be included in this analysis, an investment must be:
- Dated between 01 July 2024 and 30 September 2024
- Be publicly announced
- Some form of equity investment
- Secured by a non-listed UK company
The figures shown are based solely on announced deals to ensure consistent, comparable quarterly data, as unannounced deals often surface well after the quarter ends. Beauhurst tracks both announced and unannounced deals, but only the former are used for a timely like-for-like comparison between quarters.
Q3 2024 figures
£1.48b invested
291 deals
Q3 2024 v Q2 2024 (previous quarter)
- £1.48b invested in Q3 2024, £2.33b less than Q2 2024
- 291 deals done in Q3 2024, 282 less than Q2 2024
- 61% decrease in amount invested
- 49% decrease in number of deals
Q3 2024 v Q3 2023 (year-on-year)
- £1.48b invested in Q3 2024, £1.35b less than Q3 2023
- 291 deals done in Q3 2024, 290 less than Q3 2023
- 48% decrease in the amount invested
- 50% decrease in the number of deals
Quarterly review
There was a sharp reduction in the number of announced deals and value invested in Q3 compared to Q2 2024. Whilst this is a continuation of alternating quarters of high and low amounts invested, the 61.2% decrease in the amount invested is much more stark than the 24.1% reduction seen in the previous instance between Q4 2023 and Q1 2024.
The sections below on regional trends and deal size offer a detailed view of this quarter’s investment landscape. London and the North West experienced the steepest declines in investment, and the average deal size indicates that the drop in deal volume is the primary factor behind the lower total investment value this quarter.
The Q3 2024 data indicates a growing likelihood that total investment and deal counts for 2024 will fall below 2023 levels. However, there is cautious optimism for Q4 2024—not only because this quarter is typically stronger due to the alternating high low investment pattern but also because low deal numbers and amounts raised in Q3 2024 may reflect investor hesitation amid uncertainty around the new Labour government’s policy directions. The autumn budget, announced just last week, will certainly shape the final quarter of 2024 giving us a better insight into what to expect in 2025.
Regional trends
Once again London tops the regional comparison — companies headquartered here secured the highest proportion of deals and total amount raised at 40.8% and 48.3% respectively. These proportions are below the previous quarter’s 50.2% deals and 51.4% value raised, meaning we’re seeing more investment spread across the rest of the UK.
In fact, not all regions saw declines in investment this quarter. Companies headquartered in Scotland, Northern Ireland and the East Midlands raised more in Q4 than in Q2 2024. Scotland-based companies made up 12.3% of all deals this quarter, raising a total of 167m. This proportion of deals ranked Scotland in second place, with a £23.1m increase in amount raised from Q2 2024. East Midlands-based companies attracted 4.6% of all deals this quarter and secured £13.3m more than the previous quarter. Northern Ireland saw a modest increase in investment, up £855k compared to Q2 2024.
Considering the total value of investment in this quarter is 61.2% below the previous, it is not a surprise that some regions have seen large reductions in the amount invested. London saw the biggest reduction of £1.23b compared to last quarter.
Companies headquartered in the North West secured 6.3% of deals this quarter, ranking fourth place among UK regions. Whilst this was not far off the 7.2% of deals secured in the North West in Q2 2024, the amount raised was £677m lower. Ranking third this quarter, the South East secured 10.6% of deals, but similar to London and the North West the region experienced an £82m reduction in investment raised in comparison to Q2 2024.
Industries
The software industry dominated the investment market this quarter, with 42.6% of deals involving software companies. Companies in the supply chain, manufacturing, and commerce models industry received the second highest proportion of deals in Q3 2024 with 36.8%, up from 29.1% in Q2 2024. The information technology, telecommunications, and data industry ranks third for the proportion of deals completed with 32.6%.
In terms of the value secured, the software industry came out on top again, securing 57.5% of all Q3 investment. Whilst securing third spot in the proportion of deals, the information technology, telecommunications and data industry ranks second in terms of investment value secured at 33.6% this quarter. Companies in the life sciences and medical technology industry secured the third highest proportion of investment value this quarter with 30.1%.
Deal sizes
Top 10 deals this quarter by amount of equity investment raised
Healx
Amount: £37.0m
Deal Date: 1 August 2024
Location: East of England
Industry: Information technology, telecommunications and data, Life sciences and medical technology, Software
Healx has developed an AI-based pharmaceuticals discovery platform, aiming to identify potential treatments for rare diseases by analysing existing disease-compound relationships.
Carwow
Amount: £40.1m
Deal Date: 14 July 2024
Location: London
Industry: Information technology, telecommunications and data, Software, Supply chain, manufacturing and commerce models, Travel and transportation
Carwow operates a price comparison website where users can sell their cars to dealerships and also purchase and lease cars from local and national dealerships.
The Bank of London
Amount: £42.0m
Deal Date: 31 August 2024
Location: London
Industry: Financial services, Software
The Bank of London operates a clearing, agency and transaction bank for corporate clients, as well as developing banking software.
Constructive Bio
Amount: £43.2m
Deal Date: 24 September 2024
Location: East of England
Industry: Life sciences and medical technology
Constructive Bio has created synthetic genomes and new classes of enzymes, biomaterials and pharmaceuticals for commercial use.
FINBOURNE
Amount: £45.0m
Deal Date: 10 September 2024
Location: London
Industry: Financial services, Information technology, telecommunications and data, Safety and security, Software
FINBOURNE runs a data analytics platform aimed at the asset management industry, including tools such as portfolio management and data virtualisation.
Basecamp Research
Amount: £45.9m
Deal Date: 9 September 2024
Location: London
Industry: Information technology, telecommunications and data, Software
Basecamp Research has made a biological AI modelling software with the aim of designing complex biological systems such as enzymes, proteins and genomes, for future therapeutic use.
Riverlane
Amount: £58.6m
Deal Date: 5 August 2024
Location: East of England
Industry: Information technology, telecommunications and data, Software
Riverlane has developed proprietary software to reduce data errors in quantum computing.
Resolution Therapeutics
Amount: £63.5m
Deal Date: 30 September 2024
Location: Scotland
Industry: Life sciences and medical technology
Resolution Therapeutics has created specialised cell therapies aimed at treating inflammatory organ diseases.
CloudPay
Amount: £94.2m
Deal Date: 8 August 2024
Location: South East
Industry: Financial services, Software
Cloudpay has created cloud-based software that enables multinational organisations to manage their payroll.
Flo Health
Amount: £156m
Deal Date: 30 July 2024
Location: London
Industry: Healthcare and wellbeing, Software
Flo health has developed an app that monitors ovulation cycles and provides advice on women’s health.
Conclusion
The latest quarterly data on the equity market reveals a sharp decline in both the number and total value of announced investments. This raised the question of whether there was some hesitation among investors due the Labour Party’s Budget held on 30th October 2024.
The regional distribution shows that London, the North West, and the South East bore the brunt of this downturn, with much lower figures compared to last quarter. Yet, there were some regions that showed resilience in the face of the declining market, improving upon Q2 2024 data. Following Labour’s Budget, the upcoming quarter’s data will outline what lies ahead in the investment landscape.
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