OK, it wasn’t all doom and gloom last year on the UK start-up front, according to this data from HSBC;
UK startups and scaleups raised $23.6 billion in venture capital funding in 2025, a 35% increase on 2024 and the first annual growth in UK VC investment in four years, according to new analysis from HSBC Innovation Banking UK and Dealroom. The rebound makes 2025 the third-highest year on record for UK startup funding, underpinned by renewed investor confidence, strong late-stage activity and a surge in AI investment.
The UK innovation economy is now worth a combined $1.3 trillion in enterprise value, with more than half of this value (58%) generated by companies founded since 2010. This growth continues to translate into meaningful economic impact, with UK startups now employing over 1.8 million people.
Megarounds drive growth
The recovery in UK VC investment during 2025 was fuelled by a resurgence in late-stage megarounds of $100 million or more (36 megarounds), coupled with investment growth across all life stages, from seed to breakout stage.
The largest raise of the year came from Revolut, which secured $2 billion and is now valued at $75 billion. Other notable rounds included Rapyd ($500 million), Verdiva Bio ($411 million) and CityFibre ($500 million), reflecting sustained investor appetite for scale across fintech, health and infrastructure.
The UK has now produced more than 200 unicorns and $1 billion-plus exits, with 16 new unicorns added in 2025 alone. The 200-unicorn milestone was surpassed in the first week of 2026, making the UK the third country, after the US and China, to reach this level, achieving the milestone just six years after passing 100 unicorns in 2020. Notably, 37% of UK unicorns remain at the pre-exit stage, highlighting a substantial pool of unrealised value and a strong pipeline for future exit activity.
A record year for AI investment
UK AI startups raised a record $7.9 billion in venture capital in 2025, up from $4.4 billion in 2024, with AI accounting for 33% of all VC investment during the year, compared with 25% the previous year. Major rounds contributing to this total came from the likes of AI infrastructure company Nscale, DeepMind drug discovery spinout Isomorphic Labs, and AI avatar platform Synthesia. The scale and breadth of investment reflects continued momentum across both AI infrastructure and applied AI, as use cases mature across healthcare, finance, media and industrial sectors.
Fintech remains the UK’s most funded sector
Fintech was once again the UK’s most funded innovation sector in 2025, driven by large scale investment into companies such as Revolut, FNZ and Rapyd. In total, more than 300 fintech funding rounds were completed during the year, attracting $6.6 billion in VC investment.
Health ranked as the second most funded sector, securing $4.2 billion in new investment. Leading rounds included Isomorphic Labs, Verdiva Bio and OrganOx, reinforcing the UK’s position as a global hub for health tech and life sciences innovation.
UK retains Europe’s leading position
The UK remained Europe’s leading destination for venture capital in 2025, raising more investment than Germany ($8.1 billion), France ($7.7 billion) and Switzerland ($3.6 billion) combined.
Within the UK, London continued to lead the way, attracting $17.7 billion in venture capital, followed by Cambridge ($2.2 billion) and Oxford ($707 million), reflecting the continued depth of the UK’s innovation ecosystem beyond London.
Secretary of State Liz Kendall said: “This investment is a testament to British innovation and enterprise. From fintech, to AI, to Deep Tech and life sciences, our startups and scaleups are leading on the world stage.
“This government is committed to backing our innovators and entrepreneurs. We will continue to create the conditions for these brilliant initiatives to start, grow and succeed right here in the UK, creating great jobs and opportunities for people in every corner of our country.”
Simon Bumfrey, Head of Banking, HSBC Innovation Banking UK said: “2025 demonstrated the underlying strength of the UK’s innovation landscape, as VC investment surged to its strongest level in four years and the third highest on record. This signals not only a renewed wave of investor confidence, but also highlights the impactful contribution of tech and life sciences to the wider UK economy. Growth was evident across all stages of funding, with strong late-stage activity complemented by sustained momentum at the breakout and early stages. This showcases the depth of high-quality companies being built and scaled across the ecosystem, with the UK also continuing to lead in spinout value creation in Europe.
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