VC investment into start-up and scaling businesses across the North West accelerated in the opening quarter 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 the final quarter of 2024. The level of investment also more than tripled on the first quarter of last year.
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.
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Companies in the IT and digital sector secured the highest volume of investments, with 12 deals delivered across the first quarter. One of the biggest raises was a £15.8m investment secured by digital assurance tech provider OneID, and £14.8m raised by customer service software developer Plain.
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.
The latest KPMG Private Enterprise Venture Pulse report showed that the UK continues to come out on top across the EU with a total of £4.1bn raised across 507 deals during the first quarter of 2025.
However, there was a decrease in the overall level of investment, dipping from £4.4bn to £4.1bn, when compared to Q4 in 2024.
The total volume of UK VC deals also reduced 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.
Chris Stott, Manchester office senior partner at KPMG UK, said: “Despite significant headwinds during the first few months of the year, it’s been clear to see that the North West’s business community remains growth-focused, resilient and open for investment. Growth forecasts regularly place the region in a stronger position than the UK as a whole, underlining why this is fantastic place to do business, and where investors will find some of the best opportunities to deploy capital in the UK.
“The North West is also becoming a UK-leading location for investment opportunities in digital technologies, with a wealth of high-growth IT innovators focused on harnessing the advances in AI and emerging technologies. High deal volumes for the IT sector in Q1 were underpinned by our enviable tech business ecosystem, openness to collaboration across the market, and strong education and skills networks delivering the talent needed for growth.”
Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, added: “In a financial climate that is currently fluctuating on a daily basis following the recent activation of tariffs across the globe, investors are backing companies that offer the fastest path to profitability.
“This has made it challenging for UK startups in IP rich areas as these are longer term investment areas, which, while not favourable at this moment, could actually provide excellent opportunities in the coming weeks, months and years.
“This switch could indicate we are at risk of missing out on important investment in these sectors, which are key to driving long-term economic growth and supporting our future workforce, and therefore should ensure we all be doing as much as we can to make these investments as attractive as possible.”
