AI drives record share of UK VC investment – HSBC Innovation Banking x Dealroom
UK artificial intelligence startups secured $2.4bn in venture capital funding in the first half of 2025, representing 30% of all UK VC raised – the highest share on record, according to new analysis from HSBC Innovation Banking UK and Dealroom. A decade ago, AI accounted for less than 13% of UK VC activity.
This surge reflects both the maturity of the UK’s AI ecosystem and its widening applications across industries – from personalised medicine in healthcare to collision-avoidance technology in shipping. Some of the largest rounds in the first half of 2025 included AI drug discovery company Isomorphic Labs ($600 million), generative AI media platform Synthesia ($180m), and autonomous shipping technology startup Orca AI ($72.5m).
While London remains a global AI hub accounting for 68% of the 179 AI funding rounds across H1, activity beyond the capital is gaining pace. A total of 57 AI deals were closed outside of London, with startups attracting investment from Bude to Paisley, and Diss to Castlereagh, underlining the UK’s nationwide AI momentum.
VC investment remains resilient
UK companies raised more than $8bn in venture capital in H1 2025, up 3% compared to the second half of 2024. This represents a near tripling of VC investment compared to ten years ago. Notably, UK startups have now attracted over $3bn in funding every quarter for six and a half years straight, highlighting the sustained strength of the UK’s innovation economy.
UK maintains lead in Europe
UK startups raised more venture capital than any other European country in H1 2025, with $8bn raised, compared to $4.4 bn in Germany and $3.2 bn in France. This gives the UK a commanding 30% share of all European venture capital investment year to date. Beyond London, the top regional hubs for VC funding in H1 2025 were Cambridge ($450m), Oxford ($331m), Cardiff ($172m), and Glasgow ($106m).
Health and Fintech leading sectors
Health narrowly edged fintech to be the UK’s most funded innovation sector in H1 2025, with both securing $2.3bn in new funding. Enterprise software followed closely behind, attracting $1.9bn.
Notable megarounds this quarter came from fintech’s such as wealth management platform FNZ ($500m), remittance payments startup Zepz ($165m) and payments company Dojo ($190m).
The UK has now produced 188 unicorns, with Mubi and Oxford Ionics joining the ranks this quarter. Of these, 117 have already realised their $1bn plus valuations via exits.
Simon Bumfrey, head of banking, HSBC Innovation Banking UK said: “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. 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.”