Viewed from a macro perspective, 2022 is unlikely to be remembered fondly by many. Disease, war and incompetent politicians combined to cause levels of inflation and economic uncertainty many had forgotten were even possible. The knock-on effects on public markets provided something of a shock to investors and companies alike.
The value of the FTSE AIM All Share Index fell by 31% while, according to a report by KPMG, the value of funds raised via IPOs in 2022 fell by 93% year on year. Within these dire statistic there were some notable exceptions, such as (shameless plug ahoy) Bloomsbury Publishing, who followed up a stella 2021 with further growth, which was reflected in 21% increase on their share price [Editor’s note: The CEO of Bloomsbury Publishing, Nigel Newton, will be speaking at the Master Investor Show].
The markets are recovering, but such a tumultuous year appears to have had something of a silver lining for privately held companies as capital took flight to less sensitive assets. This is reflected in the annual report from Seedrs. Over 2022 Seedrs facilitated 324 fund raises, involving 141,000 investors, with £555 million raised. In addition to this, Seedrs secondary market saw equity in 464 companies traded. The report identifies two sectors in particular which bucked the wider investment trends: Sustainability and Food & Beverages.
Investment in sustainability focused companies, particularly ClimateTech, surged in 2022. PWC estimate that more than 25% of all venture funding last year was channelled into ClimateTech start-ups, a trend that was reflected on the Seedrs platform with 59% more companies raising funds from 38% more investors than in 2021 and total funds invested rising from £15.7m to £40.1m.
While not quite as dramatic as this, Food & Beverage companies fared well too, with a 14% increase in funding. The Seedrs report pinpoints the pandemic and economic travails as driving the growth of a ‘home drinking’ trend which has been hugely beneficial to makers of craft beer, gin, rum.
As the report illustrates, while global investment activity declined substantially in 2022 there were (and are) opportunities out there for discerning investors. We’ll be hearing from and discussing some of these at the Master Investor Show on the 18th of March, so if you haven’t booked your ticket yet you should get on and do so. A day well spent could tee up your investments for the rest of the year so please do join us.
The full Seedrs report can be downloaded here.