The first three months of 2009 were the worst period of tech investment in the UK and Ireland since Q3 2006, according to research firm Ascendant. Just 44 businesses received funding in Q1—and the total of £114 million is a world away from the £357 million invested in Q108. The year-on-year 68 percent drop is worse than the decline in the US, where investment dropped 61 percent since Q108, according to the National Venture Capital Association. Last year may have been something of a peak, however: a previous Ascendant study showed last year was the best year for investment since the dot-com bubble days of 2001.

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—Average deal size shrinks: The average size for VC deals in Q1 was £2.6 million, compared to £5 million in Q108. The largest deal 12 months ago, the £50 million funding for Spinvox, is almost five times the £11 million received by Viagogo in Q109’s biggest deal. And it’s not just that VCs are investing less, they are also fewer investors around: In Q109, there were 61 active investors, a 40 percent drop year on year. Big and small firms have backed away from investments with government-basked regional funds, and angel investors playing a bigger role role than previously. More after the jump…