Venture capital investment into UK startups and scaleups in 2025 grew annually for the first time in four years, according to new analysis.
Research from HSBC Innovation Banking UK and Dealroom revealed that $23.6bn of VC investment went into British businesses last year, representing a 35% increase from 2024.
This growth marks the first annual growth in UK VC investment since 2021, suggesting a rebound for the British startup and scaleup ecosystem after a difficult period.
According to the new research, 2025 was the third-highest year on record for UK startup funding, with strong late-stage investment activity and a surge in AI interest being suggested as potential causes.
While traditionally the UK is seen as having a strong early-stage funding environment that diminishes as companies scale, last year saw a resurgence in late-stage rounds, notable including 36 ‘megarounds’ – rounds worth $100m or more.
Among the firms pulling in huge late-stage investments were Revolut, which raised $2bn, Rapyd, which raised $500m and Verdiva Bio, which raised $411m.
Last year alone saw 16 new British unicorns, bringing the country’s total past 200, behind only the US and China.
AI was unsurprisingly a key area of investor interest, with UK startups in the sector pulling in a record $7.9bn last year, up massively from the $4.4bn the year before and representing a third of all VC investment in 2025.
“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,” said Tech Secretary Liz Kendall.
“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 at HSBC Innovation Banking UK said the figures signal “not only a renewed wave of investor confidence, but also highlights the impactful contribution of tech and life sciences to the wider UK economy”.
