The number of investments made into start-ups and high-growth businesses in the UK fell significantly in the first quarter of 2016, according to new research by Beauhurst.
Compared with the previous quarter, the total number of deals was down 30%. But compared with the same period last year, investments plunged 44%. The study showed that the decline was particularly evident in the UK's software sector, where there were just 283 investments, compared with the quarterly record of 463.
However, Beauhurst said there was huge cause for optimism. Despite a fall in the number of deals, the value of them actually increased. Total investment rose from £1.1 billion in the final three months of 2015 to £1.3bn in the first three months of 2016, keeping it on part with the first quarter of last year.
Investment in seed-stage companies rose 119% on the final three months of 2015 and 129% on Q1 last year.
And the average amount invested hit a record high of £20.4 million.
There was clear divide in locations, however, with London securing most. Emphasising the extent of the divide, Edinburgh and Manchester saw 23 investments completed between them. In a stark contrast, the Tower Hamlets area of London alone reported 25.
Beauhurst CEO, Toby Austin, said: "In our overview of all of 2015's investment, we predicted that 2016 wouldn't show much growth, and this is looking increasingly likely to be true. Deal numbers - the main bellwether of market health are falling alarmingly, and there is a growing trend towards fewer, high-value fundraisings.
"As usual, Crowdfunding attracts controversy with its disruptive impact and high visibility. It is showing no sign of letting up, as the platforms continue to top investor rankings for the most individual deals. However, even Crowdfunding is not immune from the slump in deal numbers, with a 25% drop on Q4/15 figures."
You can find the full report here.