UK Venture Capital Funding Plummets as Rates Hem in Investment

UK venture capital funding plummets as interest rates stifle cash flow

UK venture capital funding took a massive hit in 2023 as rising interest rates and an economic downturn stifled cash flow into start-ups and tech firms, according to new data. This setback comes after a decade of booming venture capital firms, which began to slow down dramatically due to Russia’s invasion of Ukraine and central bankers increasing interest rates to combat inflation. The higher borrowing costs made investors skeptical of high-growth, loss-making start-ups, thereby reducing their funding. It is clear that tough conditions plagued the UK venture capital sector throughout the year.