In 2020, 114 CreaTech businesses raised a total of £501 million of growth equity capital, compared with 144 businesses raising £709 million in 2019.
The data comes from a Moore Kingston Smith report which found a 21% year-on-year decline in the number of deals completing and a 29% decrease in the amount of funds raised.
The average deal size in 2020 was £4.4 million, a 10% decrease on 2019, where the average deal size was £4.92 million, but more in line with 2018, where the average was £4.45 million.
When the authors examined quarterly data, they found that the CreaTech sector had a particularly difficult second half of the year. Previously, the CreaTech sector had accounted for between 15% and 20% of all growth capital deals, but this fell to just 11% in Q3 and Q4.
Unlike the wider growth capital market, which saw a marked improvement in the final six months of 2020, businesses in the CreaTech space failed to take advantage of what was a more benign environment for raising capital, spurred on by the UK government’s Future Fund initiative.
Firms involved in the CreaTech sectors, providing the technology that powers the UK’s creative industries, appear to have been affected more than most by the pandemic. Some will have been in the position of offering technological adaptations to lockdown, and therefore found themselves able to raise growth capital.
But many saw their order books dry up, as their end clients in the media and entertainment space effectively shut up shop for most of the year
Download the full CreaTech Growth Capital report.
Image: from 'Growth Capital in the CreaTech Sector', Feb 2021, Moore Kingston Smith