UK Law and Practice Contributed by: Dylan Doran Kennett, Michael Jacobs, Stephen Newby and Mark Ife, Herbert Smith Freehills LLP
1. Trends 1.1 VC Market Financings
tion rationalisation. Gett’s shareholders included VNV Global, Access Industries and MCI Capital. June 2024 saw the IPO of British single-board computer manufacturer Raspberry Pi on the London Stock Exchange, valuing the company at approximately GBP540 million at the time of listing. Raspberry Pi’s investors included British semiconductor and software manufacturer Arm and Sony’s semiconductor unit. The latter half of 2024 also saw significant exits in the life sciences and AI sectors, with pharmaceu - tical behemoth Merck completing its acquisition of UK-based ophthalmology biotech company Eyebiotech Limited (EyeBio) for approximately USD3 billion in July 2024. The largest AI exit was the EUR1.7 billion reverse merger of UK-based ecommerce and sales AI-enabled solutions pro - vider Rezolve Ai with Armada Acquisition Corp, seeing Rezolve debut on the Nasdaq in August 2024. 1.2 Key Trends Much like in the US, the UK’s current economic climate has forced the VC market to shift from a strategy of “growth at all costs” to one where companies need to show strong positive unit economics and a pathway to profitability if they are to remain attractive for funding. Company valuations have started to align more with their public market comparables but, broadly, there may still be a delta in the “bid/ask” spread in rela - tion to valuation, with investors not necessarily willing to subscribe at valuations that founders and management are proposing. Where there is a large difference between valuation expecta - tions, this can be bridged on terms such as the liquidation preference multiple, anti-dilution or subscription rights in a warrant or convertible instrument to grant preferential equity rights.
Of the publicly disclosed transactions, one of the largest UK venture financings over the past 12 months occurred in May 2024, with London- based autonomous vehicle technology company Wayve securing a substantial GBP840 million investment in its Series C investment round led by SoftBank, with contributions from NVIDIA and Microsoft. Other notable financing rounds in the UK included the following. • In May 2024, London-based fintech lend - ing service Abound secured funding that in aggregate could extend up to GBP800 million in a mixture of equity and debt finance. The financing encompasses a multi-year asset- backed debt arrangement facilitated by long- time supporter Citi, with the Series B equity portion being led by Silicon Valley-based GSR Ventures. • London-based challenger bank Monzo also secured funding in May 2024, which in aggre - gate could extend up to GBP497 million in a mixture of equity and debt finance. The initial round was led by CapitalG, a fund owned by Alphabet, while the top-up round was led by Hedosophia (an early backer of Wise and Uber) and Singapore’s Government Invest - ment Corporation. Exits In May 2024, Pango completed its GBP138.6 million acquisition of Gett, the mobility tech player, marking the largest exit in UK venture capital for the first half of 2024. Gett had previ - ously fallen out of unicorn status and saw its lower valuation create acquisition opportunities, a trend often observed during periods of valua -
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