Business News Round Up (17/04/2025)
North West startups kick off 2025 with £138 million VC investment
VC investment into start-up and scaling businesses across the North West accelerated in Q1 of 2025, according to the latest KPMG Private Enterprise Venture Pulse report. Businesses in the region received £138m from VC investors in the first three months of this year which represents an 86% increase, having raised £74m in Q4 of 2024. The level of investment also more than tripled on Q1 2024. Twenty-six investments in the region highlight ‘a return to Q3 2024 levels’ and ‘sustained appetite’ for VC investors looking to support the North West’s burgeoning start-up community. Companies in the IT and digital sector secured the highest volume of investments, with 12 deals delivered across Q1. More widely, national investment figures revealed a shift towards larger investments with the UK remaining the number one country in Europe for venture capital investors despite a decline in overall investment and the number of deals.
UK SMEs show signs of recovery while mid-market thrives
UK small and medium-sized enterprises (SMEs) have seen business activity expectations improve for the second month running in March, driven by the highest levels of optimism seen since October 2024, according to figures from the NatWest UK Business Growth Tracker. NatWest’s data shows that mid-market businesses continued to outperform the wider UK economy last month, as business activity rose for the sixteenth month in a row, with the Purchasing Managers’ Index, which provides an overview of business performance and sentiment across the UK, picking up from 53.1 in February to 54.7 in March. According to the Tracker, this upturn in business activity among mid-market firms was driven by stronger performance in the service sector, which registered the fastest increase in output for six months. However, while the private sector recorded marginal growth in the first quarter of 2025, UK SMEs saw a modest decline in output levels.
https://www.digit.fyi/uk-smes-show-signs-of-recovery-while-mid-market-thrives
‘Strong’ start for Manchester city centre office take-up – expected to continue across remainder of 2025
Take-up for Manchester city centre reached more than 300,000 sq ft across 53 deals in the first quarter of 2025, according to the Manchester Office Agents Forum. The take-up was 319,995 sq ft, with the strong start to the year following an active 2024. Last year saw a total of 1.22 million sq ft transacted in the city centre, in-line with the ten-year average. Notably, the first quarter was notably buoyed by Trader Media’s commitment to 130,000 sq ft at 3 Circle Square, a development by Bruntwood SciTech. Continuing to perform strongly was the education sector, with a total of three deals totalling 47,572 sq ft. The take-up results for Q1 2025 represent the best performance in a first quarter since 2020. For the remainder of 2025, the outlook remains positive, with several sizable Grade A requirements under offer and a healthy pipeline of occupier demand.
Shift to larger venture deals across UK says report
National investment figures revealed that a shift towards larger investments has created a challenging environment for UK start-ups. The latest KPMG Private Enterprise Venture Pulse report showed that the UK notched up a total of £4.1 billion raised across 507 deals during Q1 2025, securing four out of the top 10 deals including the biggest in Europe after London-based AI drug discovery Isomorphic Labs scooped a £453m award. This was also partly driven by strong investment in the health and biotech sector during Q1 2025, including UK-based Verdiva Bio securing £309 million and Cera £113 million. However, overall, Q1 recorded a fall when compared to Q4 2024 in both the overall level of investment (from £4.4bn to £4.1bn) and total volume of UK VC deals (from 569 to 507) – driven by investor confidence currently being aligned with more established, proven start-ups given uncertain market conditions and ongoing lack of exits.