VCTs provided a vital source of funding amid a broader venture downturn, which saw total venture funding in the UK fall by almost a third in 2023.

VCTs provided patient capital and investment expertise to scaling businesses throughout the UK. In turn, these startups and scaleups often had an outsize impact on economic growth, job creation, technological innovation, and productivity.

2023 saw several notable investments, including Albion’s participation in Quantexa’s Series E funding round, which made it the first British ‘unicorn’ of 2023, and Transreport’s £10 million funding round, which included investment from Pembroke and Puma VCTs.

The data published by the VCTA highlighted the industry’s resilient focus on providing evergreen patient capital to breakthrough businesses, offering early-stage firms the funding, time, and support needed to reach their growth potential. Across all investments, the average age of a company receiving its first funding from a VCT in 2023 dropped to 5.2 years, the lowest figure on record, and consistent with the trend over recent years.

VCTs were also able to back companies for longer, which had been an additional benefit to UK startups and scaleups in recent years as SMEs continued to weather the turbulent economic environment; from Brexit, through Covid, and into the recent inflationary pressures. The average age of firms receiving follow-on investments from VCTs rose to 7.8 years, up from 7.2 in 2022, further highlighting the need for patient capital across the UK to bridge the growth funding gap.

Chris Lewis, Chair of the VCT Association, said: “VCTs continue to provide much needed growth capital to many of the UK’s most promising young and early-stage companies. The Government’s recent decision to extend the VCT scheme by a further ten years demonstrates the significant economic value being driven through this model of patient capital investment.

"This data highlights how important the continued success and growth of the VCT scheme will be for the UK and its growth companies. VCTs offer a patient approach to investing, backing companies throughout their scale-up journey regardless of economic cycles. As the economic picture improves, UK entrepreneurs know they can count on the VCT industry to be a steadfast partner in realising their growth ambitions, providing both funding and advice."

In total, £3.6 billion has been deployed by VCTA members since 2016, helping to fuel the ambitions of entrepreneurs across all regions of the country.