VC investment in the UK is looking up with a sustained run of increased investment not seen since the high-water year of 2000, according to Ascendant, the technology corporate finance advisor.

“VC interest in the sector continues to grow – more money is being invested in a greater number of deals by a growing pool of investors,” said Stuart McKnight, managing director of Ascendant.

VCs invested over £300m in technology deals in Q1 2007, a 64 per cent increase from Q4 2006, and up from the £220m invested in Q1 2006, said Ascendant.

“It was the first time since 2000 that the UK has experienced three consecutive quarterly increases in investment in the sector,” added McKnight, who predicted that, “investment for the whole of 2007 might get close to £1bn. Investment has not been at these levels for nearly 6 years.”

In Q1 2007 over £300m was invested in 56 deals worth over £0.5m each by 106 active investors, said Ascendant.

The ten biggest deals were: Plastic Logic, £51m; TWMA £27.6m; Picsel Technologies £23m; Frontier Silicon £16m; Truphone £12m; Workshare Technologies £11.7m; Cambridge Broadband £11m; Azea Networks £10.2m; Tribold £8.3m; and Scansafe £7.7m.

The top 10 deals represented close to 60 per cent of funds invested but 18 per cent of the deals.

Semiconductor/optoelectronic companies picked up £75m in Q1. However, this sum was shared by just four companies: Plastic Logic, Frontier Silicon, Silistix and Intense.

The busiest investors were Amadeus, Intel, Quester, Benchmark, Tudor Investment Group and South West Ventures.

London’s relative share of VC money dropped to around 20 per cent, whilst Cambridge took close to 30 per cent, and Scotland received 20 per cent.