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The South West saw a surge in the number of companies securing funding in the third quarter of the year, despite the difficult economic climate, a new report has found.

Innovative businesses in the region secured £53m in venture capital (VC) investment over the period, according to KPMG’s latest Venture Pulse report. Although deal values were down compared to last quarter (£63m), the number of companies securing funding was up by 52% - from 12 to 23 deals.

Among the companies that landed investment was Exeter-based Sparx Maths, an in-class and homework platform, and Marlborough-based BBC Maestro, an online education platform providing access to expert masterclasses.

Kay Drury, transaction services partner at KPMG, said: “Amid a growing energy crisis, economic turbulence, continued pandemic impacts and increased pressures on businesses, funds continue to flow into educational solutions, business productivity software and cleantech."

Ms Drury said there were still "opportunities for good businesses with solid growth plans" to attract investors, despite the challenges currently facing the economy.

She added: "Competition for good businesses in strong sectors will be fierce and could lead to some deal heat as we head into the final quarter of the year. However, as the economic conditions continue to deteriorate, it is likely that VC investment will remain subdued heading into the fourth quarter of 2022 and beyond.”

Nationally, VC investment into the º£½ÇÊÓƵ fell dramatically during the summer as the economic challenges and an impending global recession saw investors taking a more cautious approach.

The consumer and retail space saw the sharpest decline as VC investors turned their attention away from the companies in the sector - regardless of deal stage - in favour of those focused on business productivity, digital enablement and B2B fintech solutions.