Newcastle has been named as one of the top cities in Europe for attracting venture capital investment, according to new data.
The research, carried out by Sifted.eu using data collected from PitchBook, found that Newcastle had the 17th highest number of investment deals of all European towns and cities, excluding capital cities.
The data, which tracked deals during the five years between 2013 and 2018, found there were 72 deals completed in Newcastle, putting it ahead of Valencia in Spain (70), Birmingham (68), and Sweden’s Gothenburg (62).
The data supports Newcastle’s reputation as a hub for start-ups and growing businesses and shows the city is competing well with other cities in Europe.
However, one area the North East has struggled with is growing start-ups into larger companies. This fact was supported by Newcastle’s failure to make it into the list of 25 non-capital cities with the highest number of exits.
Unsuprisingly the top three locations that attracted the highest number of investment deals were all major European cities. Barcelona was the clear favourite with 474 firms involved in investment deals during the five years.
Munich came in second on the list with 331 deals, while Milan was third with 238.
The UK proved the most popular place for investors to sink their money into, with UK cities making up 10 of the top 30 locations on the list.
Cambridge was the most popular UK city with investors, coming in at number four on the list with 214. The city, known for its university and hub for tech businesses, was followed closely by Edinburgh, which had 188 deals.
Also included in the list was Oxford (136), Manchester (124), Bristol (96), Glasgow (85), Belfast (80), Birmingham (68), and Cardiff (60).
Explaining why she believes Newcastle companies are so popular with investors, Yvonne Gale, managing partner at NEL Fund Managers, said: “A lot of different factors come together to make Newcastle, and indeed the wider North East, a very active and attractive area for business investment.
“Newcastle is, relatively speaking, a small city, and is home to a range of very strong, well-connected networks running between business owners, investors, intermediaries, sector-specific clusters and supporting bodies such as Generator North East, Dynamo and Invest North East England.
“The central focus that the work of the North East Local Enterprise Partnership provides on different emerging business areas and the momentum this helps to create, is also a big advantage.
“The old adage of ‘people buy from people’ is very much borne out through these networks, and the personal contacts they contain are invaluable in moving deals forward.”
She added: “Having two excellent universities in Newcastle, along with others not far away across the region, provides an excellent breeding ground from which spin-out businesses
regularly emerge with real commercial potential that can be realised
with the right kind of investment support.
“There’s a clear entrepreneurial spirit within these academic institutions and this is reflected in the ever-growing importance of North East knowledge economy to the success of the wider region.”
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