UK AI startups have raised $2.4bn (£1.7bn) in venture capital funding in the first half of the year, marking the highest share of VC investment for the sector on record.
AI companies represented 30% of all venture capital funding secured by British companies in the first half of 2025, up from the 13% share recorded a decade earlier, according to analysis from HSBC Innovation Banking and Dealroom.
Among the top rounds for the sector so far this year were Synthesia’s £146m Series D, ElevenLabs’s £184m Series C and the £440.8m raised in DeepMind spinout Isomorphic Labs’s first external round.
The report tracked a total of 179 funding rounds for the UK AI sector so far in 2025, with startups based in London making up 68%, though it noted activity beyond the capital was picking up.
“It’s hugely exciting to see AI investment gathering pace, as new and varied use cases with real-world impact continue to emerge, from breakthroughs in personalised medicine to smarter logistics and financial services,” said HSBC Innovation Banking chief executive Simon Bumfrey.
“What’s especially encouraging is the diversity of innovative AI startups across the UK – not just in established tech hubs, but in towns and cities nationwide.
“At the same time, the UK’s innovation economy continues to show resilience, attracting significant capital across all growth stages, and firmly holding onto its position as Europe’s leading tech hub despite broader geopolitical uncertainty.”
Other top innovation sectors for VC investment so far in 2025 include health tech and fintech, both raising $2.3bn (£1.7bn) respectively and enterprise software, which raised $1.9bn (£1.4bn).
The research noted that total VC investment in the UK hit $8bn (£5.9bn) in the first half of the year, up 3% from the second half of 2024 and almost triple the amount raised in 2015.
This figure places the UK firmly at the top of Europe, compared with the $4.4bn (£3.2bn) raised in Germany and the $3.2bn (£2.3bn) in France. In total, the UK commanded a 30% share of total European VC funding in the past year to date.
The UK has now produced 188 unicorns, with recent entrants including streaming service Mubi and quantum firm Oxford Ionics.
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