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The regional disparity of VC funding continues

On the 14th September 2021 the British Business Bank (BBB) helpfully published a list of UK companies that have converted their Future Fund convertible loans, implying that they have successfully raised follow-on VC funding and are making good progress.

Congratulations are due to all those companies.

The BBB also very helpfully published their locations. I've taken this data and plotted it in the graph below. In case you are wondering, Cambridge is with East of England and Oxford is with the South East and so London is indeed just London.

The dominance of London (not the South and East) is mind boggling to me. For example, London has roughly 4 times the population of the North East and, on this measure, 30 times the VC investment activity. In previous, not yet published, work I've looked at this comparison using a number of different measurements, but the results are remarkably consistent however you define or measure VC activity.

Are London businesses better investments? Is it because most investors are based in London and never get out? Are there cultural issues at play? Does it reflect wider economic activity*? (I don't think it does by the way. GDP per capita is less in the regions, but not by a factor of 30). Does this mean that the best investment opportunities are in the regions?

What's going on?

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