According to data generated by Plexal‘s Startup Tracker, £1 billion has been raised by early stage tech startups in the UK during the eight weeks since lockdown began, but only £52 million (5%) has gone towards first-time investment.

As well as a fall in investment, deal numbers are also down, with the 61 deals made for first-time startups spelling a 20% slump compared to the same period in 2019.

Additionally, investment in tech startups in general has taken a 50% dip year-on year, and the amount of the deals has decreased by 35%.

This drop in funding has proved to be an accelerating trend, with investment dropping by 73% during the second four weeks of lockdown, compared to a 37% increase in the first four weeks.

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“While tech companies are still raising funding in the UK, we risk losing a generation of tech entrepreneurs at the earliest stages of their startup journey,” said Andrew Roughan, managing director of Plexal.

“The research shows that government support can’t come soon enough for the early stage tech companies that are unable to raise investment as a result of COVID-19.

“By only backing companies that have already raised funds, investors are ignoring the very companies that will define the future success of the British economy.”

Henry Whorwood, head of research and consultancy at Beauhurst, commented: “Whilst investors injected the capital requited to protect their portfolio companies immediately after lockdown, we are now seeing a much more cautious and risk-averse investment landscape.

“The figures for first-time funding shows a stark drop in the levels we’ve come to expect in the UK, and suggest that the weeks to come will be very challenging for early stage tech companies.”

Biggest lockdown deals by the numbers

The five highest-value deals for tech startups in the UK during lockdown so far, according to research from Plexal and Beauhurst, were as follows:

1. Cazoo (£100 million)
2. Onfido ($100 million)
3. Bought By Many (£78.4 million)
4. Privitar ($80 million)
5. Compass Pathways ($80 million)

As for the biggest deals for British tech startups that hadn’t previously received investment, the following made up the top five:

1. Audiens (£6.4 million)
2. Living Optics (£3.3 million)
3. Primer (£3.2 million)
4. Addionics (£2.8 million)
5. IRIS (£2.4 million)