An unannounced fundraising is simply an investment made in to a private company that is not announced to the public. These transactions are an integral part to understanding the beginnings and continued growth of some of the largest companies in the UK. Deliveroo, BenevolentAI and Transferwise, some of the UK’s most valuable private companies, all started their funding journey with unannounced raises.
We currently track over 7,300 companies on the Beauhurst platform that have raised equity and never announced it to the public. In 2018, 70% of equity deals were not announced to the public, and there have only been small fluctuations in this figure since 2011. However, 69% of pounds invested were announced.
Although the under-the-radar fundraisings are, on average, significantly smaller than those that are shared with the media, they can be just as – if not more – interesting, and signal that a much larger event is on the way.
Key findings since 2011
Number of unannounced deals
Number of announced deals
average deal size
Average deal size
How do we source this data?
Beauhurst is the only data provider in the world with comprehensive and structured coverage of unannounced investment deals in the UK. Using proprietary technology we monitor all SH01s (forms that companies submit when they wish to issue new shares) filed to Companies House. Sometimes these may not show genuine investment, so we’ve built an algorithm to pick its way through the minefield and flag up any filings that do. Then, one of our in-house data team will investigate and verify if a new investment has been made and upload the data to the Beauhurst platform.
SH01 filings may not show genuine investments for a number of reasons, such as the exercise of employee options; restructuring shares to make the capitalisation table look tidier for accounting purposes; or because the company paid for services in shares rather than in cash.
Why might a company want to keep their funding under wraps?
A company may choose not to announce their fundraising to the media for a number of reasons:
- The company lacks the resources to successfully promote the raise to the media
- The company doesn’t think it’s relevant to promote the funding round
- The company is hiding a down round – an investment deal in which shares are sold for a lower price than in the previous funding round
- The company is in “stealth mode” and trying to stay under the radar
- The funding round is a precursor to a more significant event, such as an IPO, crowdfunding round or large investment deal that the company doesn’t want to hint at
Even though the number of equity deals completed has increased significantly since 2011, the percentage share of unannounced fundraisings has remained fairly steady, fluctuating between a low of 65% in 2013 and a high 71% in 2017. This shows that filings are not disclosed to the media for systemic reasons, rather than being swayed by the economic climate.
total Number of UK equity deals and percent unannounced by year
As expected, Seed stage companies have a higher proportion of unannounced fundraisings than Venture and Growth stage; the larger the funding round the more likely it is to be announced to the public. Seed stage companies may not yet have the means or desire to announce their investment rounds, or may be more private about raising capital whilst they focus on research and development. A more mature company is more likely to have a high level of public interest in their funding rounds, and be more inclined to be open about their funding success.
However, even within Growth stage companies, the majority of deals are still filed discreetly. Perhaps these fundings are less newsworthy (if they simply show continued support from previous investors), concealing a down round or financial difficulty, or are helping to finance an IPO that the company is yet to announce.
Percentage of deals that are unannounced by stage of evolution
Given its innate secrecy, it’s unsurprising that Digital Security tops the list of sectors with the highest proportion of unannounced deals. The most popular sectors in the UK, Fintech and Artificial Intelligence, take a middling position in the rankings, with Challenger Banks appearing as the most vocal about their funding rounds.
We expect this is because Challenger Banks are endeavouring to be more open and communicative with their customers than industry incumbents, and are hence more transparent about their shareholders and fundraisings.
Percentage of deals that are unannounced by selected sectors
On average, unannounced fundraisings are significantly smaller in value than those that are announced. Though the precise proportion of pounds invested that are unannounced fluctuates each year, the figure has never risen above a third.
total Amount raised and percent unannounced
Despite the fact that they are often small in value, these types of transactions form an incredibly important and significant portion of the transactions in the UK’s high-growth economy.
Keeping an eye on these rounds can be invaluable to those businesses working to find and back the next billion-dollar startup, or support private companies through an IPO or financial difficulty. Get access to all of this data with a subscription to the Beauhurst platform.