Britain resists investment slowdown

EUROPEAN venture capitalists drastically reined in their investment in early-stage companies in the first three months of the year, although British backers showed signs of re-entering the turbulent market, a survey shows today.

Across Britain and the Continent, only 259 deals were done, compared with 401 in the previous quarter - a 35% decline. In value terms, that marked a drop from e1.74bn(£1.1bn) in the previous three months to e1.18bn. Early-stage investors were some of the worst sufferers from the collapse in technology share prices, and several venture capitalists had millions of pounds wiped off the value of their portfolios.

But in the UK, the market appears to have held up in the first quarter of the year, according to the report from Ernst & Young and analysts Venture One. There were 89 venture capital investments made, compared with 100 in the previous quarter, worth a total of e446m compared with e436m the previous quarter.

Venture One director of European research Steve Harmson said: 'The UK has more established investors like 3i who have experience of downturns in the past. Also, there are some great technologies in the UK, particularly around the Oxford, Cambridge and London university areas.'