A fall in venture capital deals has raised concern about the funding of Britain’s start-ups.

Recent survey data commissioned by Startups.co.uk has revealed that just 5% of UK businesses received funding from Venture Capital in 2024m compared to 13% in 2023.

This decrease could potentially reflect the cautious stance of venture firms amid economic uncertainties.

Personal savings and operating revenue have remained the most popular funding for UK SMEs, across both 2023 and 2024.

The figures confirm data from research firm Beauhurst which showed the volume of venture capital deals collapsed by almost a quarter last year.

The number of companies raising external capital fell to 5,256 from 6,885 the year before, and down from a peak of 7,890 in 2021. The last time deals were at this level was in 2015.

Henry Whorwood, head of research and consultancy at Beauhurst, said that aside from growth in AI, digital health and life sciences, deals were down across all sectors and by size of business, from start-ups to established firms looking to grow further.

“Whether this is a crisis or not is an open question. Are we going to see a wave of VC funds going bust for a lack of liquidity? Maybe not. Maybe they just don’t raise their next fund and go into stewardship mode,” he said.

“But there’s a real crisis from the entrepreneurs’ perspective and a new venture creation perspective. We need more liquidity to keep the whole thing growing and to get creative destruction,” he said.