Record levels of venture capital investment this year will help flexible office recovery in 2021

This year has seen the average VC deal increase again, despite having a lower number of transactions compared with last year. Which demonstrates that the capital is available to those companies that meet the criteria even in such difficult times. The beneficiaries of this have been later stage companies as well as accelerator and incubator companies, which have seen increases in investment of 32% and 36% respectively.

Although VC investment is correlated with increased serviced office take-up, this year has been an exception. The virus has driven low take-up due to the uncertainty in the market. However, with the high levels of investment seen this year we expected to see that change in 2021.

Technology has continued to dominate with 40% of total investment this year. Tech has seen an increase in investment of £629 million to reach an all time. The demographics of that investment have been  drastically different, last year Fintech was driving investment growth, and this year it has been outpaced by nanotechnology and restaurant technology. In a year where Covid has been the buzzword, it’s no surprise that nanotech has seen the largest investment growth with companies developing rapid diagnostic tests. However, Deliveroo emerged as this year’s biggest winner, securing £471 million (the largest deal of the year) and accounting for 91% of the investment in restaurant technology.

In terms of monthly desk costs for serviced office space, our research notes that prices have remained generally stable with little change in areas. Oxford is the only city in our list to see an increase with an increase of 7% (current monthly desk price £375), and the London City and West End markets were the only ones to see decreases dropping 8% and 3% respectively (currently monthly desk prices of £645 and £825).

*We reviewed venture capital investment, using data from PitchBook up to 15^th December 2020