Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.
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Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  • You could lose all the money you invest
  • Most investments are shares in start-up businesses or bonds issued by them. Investors in these shares or bonds often lose 100% of the money they invested, as most start-up businesses fail.
  • Checks on the businesses you are investing in, such as how well they are expected to perform, may not have been carried out by the platform you are investing through. You should do your own research before investing.

You won't get your money back quickly

  • Even if the business you invest in is successful, it will likely take several years to get your money back.
  • The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
  • Start-up businesses very rarely pay you back through dividends. You should not expect to get your money back this way.
  • Some platforms may give you the opportunity to sell your investment early through a 'secondary market' or 'bulletin board', but there is no guarantee you will find a buyer at the price you are willing to sell.

Don't put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. Learn more here.

The value of your investment can be reduced

  • If your investment is shares, the percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
  • These new shares could have additional rights that your shares don't have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

You are unlikely to be protected if something goes wrong

  • Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker.
  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA's website here.

For further information about investment-based crowdfunding, visit the crowdfunding section of the FCA's website here.
Weekly Briefing
Matthew Robineau
· 4 min read
· Updated on

Weekly Briefing: Fintech VC Growth, UK Housing Market Trends, Economic Outlook for 2025 & BoE Rate Cut Expectations

In this week’s briefing, we focus on the impressive performance of the UK fintech sector, which raised over £2.6 billion in venture capital during Q3 2024, positioning it as a European leader. We also look at how the housing market performed in 2024, as well as the current situation now we’re into 2025, from rising affordability concerns to anticipated stamp duty changes. Finally, we delve into the Bank of England’s expected interest rate cuts and their potential economic impact.

Read on to uncover how these key developments could shape the UK’s future growth and investment opportunities.

Venture Capital

UK Fintech’s Strong VC Results

  • In Q3 2024, the UK fintech sector successfully raised £2.6 billion in venture capital investments, surpassing all other industries by over £800 million, as reported in Dealroom’s UK Q3 Innovation Update, despite a general slowdown in UK startup investments during the summer months.

  • From the first to the third quarter of 2024, UK startups attracted a total of £9.8 billion in venture funding. A figure that notably exceeds the investments of Germany (£5.2 billion) and France (£5.1 billion), London alone secured £6.8 billion, outpacing entire nations.

  • Some of the most significant fundraising milestones include Flo raising £160 million as Europe’s first femtech unicorn, Cloudpay securing £96 million in August, and London-based Form3 raising £48 million in a Series C round last month.

  • Following fintech, the health and enterprise software sectors are tied for second place in funding, each attracting approximately £1.6 billion, followed by transportation (£1.6 billion) and energy (£1.4 billion).

  • “The UK fintech sector is back. Many scaleups, having emerged from a challenging funding market stronger than ever, are making a serious dent in incumbents’ market share,” said Julian Schoenig, CEO of Diesta, emphasising the resilience and competitive edge present in UK fintech companies.

 

Property Market

UK Housing Market Ends 2024 In a Positive Place 

  • Halifax reported that UK house price growth of 3.3% in 2024, now bringing the average home price to £297,000, despite ongoing affordability challenges for buyers.

  • Regional data revealed that Northern Ireland experienced the fastest price growth, followed by Northern England, with terraced homes the type that contributed most to price increases across the UK, indicating notable regional and property-type variations.

  • Looking ahead to 2025, changes in stamp duty are expected to create uncertainty in the housing market. The threshold for first-time buyers will decrease from £425,000 to £300,000 in April, while the general buyer threshold will drop from £250,000 to £125,000, which may impact future market dynamics.

  • Additionally, as covered previously, the Bank of England is anticipated to begin lowering interest rates as early as February 2025. However, Governor Andrew Bailey has cautioned that global economic uncertainties make precise forecasting of rate changes challenging, potentially adding another layer of unpredictability for the housing market.

  • Affordability remains a significant issue for some, with Nationwide’s chief economist Robert Gardner pointing out that high house prices relative to average earnings have made saving for deposits difficult, exacerbated by record rental growth and stagnant wage increases, soon to change as policy changes take effect.

  • “The looming changes to stamp duty are likely to make purchasing even more difficult for first-time buyers,” warned Holly Tomlinson from Quilter, highlighting the ever-increasing financial barriers facing new entrants to the housing market.

 

UK Economy

Bank of England Rate Cuts Expected

  • A survey of 51 economists predicts the Bank of England (BoE) will introduce at least four interest rate cuts in 2025, reducing the base rate from 4.75% to 3.75% or lower.

  • Despite this, inflation is expected to remain elevated at between 2.5% and 3.5%. This prediction is unlikely to change as persistent wage growth and rising post-budget labour costs are pressuring businesses to increase prices further.

  • Divergences remain between financial markets and economists, with market pricing in two rate cuts while many economists argue that more substantial reductions are necessary to tackle sluggish economic growth.

  • BoE policymakers are split on the best course of action, balancing the need to stimulate growth, with concerns about persistent inflationary pressures coming post-budget.

  • Internationally, the European Central Bank is projected to lower rates from 3% to 2% or below in 2025, while in the United States, economists remain divided over the Federal Reserve’s trajectory, with expectations ranging from two to four rate cuts.

UK Economic Growth Prospects for 2025

  • According to KPMG’s Economic Outlook, the UK’s GDP is expected to grow from 0.8% in 2024 to 1.7% in 2025, driven by more relaxed monetary and fiscal policies, hopefully bringing some form of recovery after a subdued performance in the latter half of 2024.

  • One key factor is that consumer spending is set to increase by 1.8% in 2025, supported by rising household incomes due to robust wage growth and declining interest rates - an uptick that would follow a cautious recovery period where many households focused on saving rather than spending.

  • Despite the anticipated growth, businesses are likely to continue passing on the costs of tax increases, sustaining inflation even as increased demand temporarily bolsters the economy.

  • Effective policy measures will be critical in addressing trade frictions, persistent inflation, and global economic uncertainties, with these factors playing a significant role in shaping the UK’s economic trajectory both domestically and internationally.

  • "Long-term UK economic growth will depend on the effective implementation of the Modern Industrial Strategy and the ability of the National Wealth Fund to identify and invest in high-impact projects. The success of these initiatives will be critical in determining whether public investment can translate into sustained economic growth," said Yael Selfin, Chief Economist at KPMG UK.

Final Note

This week’s updates showcase the intricate balancing act the UK faces in navigating economic recovery, housing affordability, and inflationary pressures.

The anticipated interest rate cuts by the Bank of England aim to stimulate growth but will require careful timing to avoid exacerbating inflation—a challenge amplified by recent budgetary changes that have added strain to labour costs and business pricing strategies.

In the housing market, while price growth remains resilient, new stamp duty thresholds and affordability challenges continue to present significant barriers for first-time buyers, however, if rate cuts are in fact around the corner, mortgages could continue to become more affordable.

Meanwhile, the UK’s fintech sector continues to demonstrate resilience, with record-breaking venture capital investments propelling scale-ups to new heights. This highlights the significant growth potential in tech and other high-impact sectors, presenting investors with opportunities to support British businesses while benefiting from tax-efficient investment options.

As 2025 approaches, the path forward will demand decisive, coordinated action to foster sustainable growth while addressing the complex web of challenges shaping the nation’s economic future.
Driving Growth.
Creating Value.
Delivering Impact.

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.