The tech sector is facing a funding shortfall, and entrepreneurs in the region will have to consider alternative sources of finance if they want to grow their businesses, according to Fresh Thinking Capital.

According to data from industry analysts at The Dealroom, the number of deals closed in the first quarter of 2022 was 2,300, the fewest since Q3 2018. There was a decrease in the overall number of deals falling to 1,700 in Q2. While the first half of 2022 saw 4,000 deals, it was the fewest half-year since H2 2015. (3,900).

Commenting on the trend, Mel Hird, director of Fresh Thinking Capital, said: “The tech sector employs over 80,000 in Yorkshire and the Humber and is a vital source of growth for the region. It’s important that it has access to the funding it needs to thrive, but global factors are sucking investment out of the sector.

“Entrepreneurs in the technology sector should consider alternative sources of funding in the current climate. Speaking to an advisory firm can help shape your options and get your business ready for investment.”

Fresh Thinking Capital launched a debt advisory business to help companies find the financial support they need to grow. Fresh Thinking Advisory supports companies seeking a wide range of funding options up to £100m.

A report from KPMG highlighted that the number of venture capital deals completed in the UK has plummeted to its lowest level since 2016 as investors take a ‘wait and see’ approach.

Mel concluded: “We aid clients in navigating the current unpredictability and locating the best partner for their venture. Our experienced team helps businesses prepare for funding and match them to the most appropriate lender. The economy is expected to have a difficult time in the short term, but we may anticipate investors returning to the market in bigger numbers in the spring of next year.”