UK firms raised £615bn in the year to February 2021, despite the challenges of the pandemic.
A survey from private fundraising solutions provider Globacap found that two-thirds (67 per cent) of chief financial officers said they raised as much or more than expected over the 12-month period.
For most (81 per cent), the pandemic has changed how they raise capital. More than half (59 per cent) sought venture capital or private equity with only a fifth (22 per cent) opting to go public and list on the London Stock Exchange or Alternative Investment Market.
Despite a string of high-profile initial public offerings (IPOs) in the UK, including Deliveroo, Virgin Wines and Trustpilot, the research revealed that the vast majority of senior executives (88 per cent) would prefer to keep their company in private hands for as long as possible.
Globacap said that these issues highlight the barriers that exist within the current private fundraising pipeline and suggest the benefits that effective use of technology could bring to chief financial officers and finance leaders trying to remain private for longer.
The majority (88 per cent) of those opting to remain private prefer to avoid private equity rounds if possible, because of the oversight and restrictions they bring. However, private equity is often the only viable option, as shorter-term investors require a route to liquidity such as an IPO.
“We’re seeing evidence of a healthy private market,” said Alexander Green, co-founder and chief evangelist at Globacap.
“Investment is continuing, so we expect to see a positive bounce back for businesses following the health crisis.
“This, coupled with the news that the UK economy is set to grow at the fastest rate in more than 70 years, is encouraging for private businesses.
“What’s more, we know that technology is now pushing out the line at which businesses have to go public, by removing the administrative burden created by an outdated process. This empowers companies to stay private for much longer while still accessing large capital for continued growth.”