The claim that UK tech investment is stagnating describes the downturn reported for 2023, not the whole picture today. The latest 2025 figures are mixed: UK startup venture capital rose sharply, while equity investment into smaller businesses fell modestly. Some regions posted large gains, but those increases were driven by a handful of big deals and do not yet establish a broad, lasting shift away from London.
Is UK tech investment stagnating?
Not across every measure. The Department for Science, Innovation and Technology (DSIT) and Council for Science and Technology, using Dealroom data in a 2026 evidence pack, report that UK startups raised $23.7 billion in venture capital (VC) in 2025, up 33% from $17.9 billion in 2024. The report describes 2025 as the first year of annual growth in four years. Its figures are nominal, cover equity rounds, and exclude debt, grants and other non-equity funding. DSIT and Council for Science and Technology evidence pack
A different measure points in the opposite direction. The British Business Bank’s 2026 Small Business Equity Tracker says investment into UK smaller businesses fell 4% to £12.3 billion in 2025. These results are not contradictory: startup VC and smaller-business equity cover different populations and funding measures.
What the main UK investment figures measure
| Indicator | 2025 result | What it measures |
|---|---|---|
| UK startup VC | $23.7 billion, up 33% year on year | Equity rounds for startups in the Dealroom dataset; excludes debt, grants and other non-equity funding. DSIT and Council for Science and Technology |
| Equity investment into smaller businesses | £12.3 billion, down 4% | British Business Bank tracker measure; early-stage seed and venture deal counts also fell. British Business Bank |
| Equity deals for unlisted Digital and Technologies companies | £8.3 billion across 1,284 deals | Company-level fundraising data for unlisted firms; not a measure of total business investment, debt, grants or listed-company equity. DSIT Digital and Technologies Sector Statistics |
| Investment into UK venture-stage businesses | £8 billion | Capital invested into companies, according to UK Private Capital—not capital raised by funds. UK Private Capital |
| Venture-fund fundraising | £2 billion raised by 42 funds | Capital raised by venture funds, a different measure from money invested into businesses. UK Private Capital |
| Software and IT services inward-investment projects | 155 projects | Count of foreign-investment projects, not a VC funding total. UK project volume fell 4% nationally and 12% in London. EY UK Attractiveness Survey |
The Digital and Technologies figures provide another view of the market, but should not be added to or treated as interchangeable with the VC or smaller-business totals. In that dataset, 20.7% of 2025 investment value had unknown investor origin; published investor-origin shares exclude that portion.
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Which UK regions are attracting startup investment?
In the British Business Bank’s smaller-business equity figures, investment rose year on year in the North West, South West and Scotland in 2025:
- North West: up 82%.
- South West: up 104%.
- Scotland: up 74%.
The Bank says the sharp regional changes were driven by a small number of large AI and energy deals. The percentages therefore do not show that investment rose by similar amounts across the typical business or across every sector in those regions.
Is tech funding growing outside London?
There are encouraging regional results, but London remains the largest centre in both of the main datasets, which use different definitions. In the DSIT/Dealroom startup VC figures, London startups received 74.7% of UK VC in 2025. In the British Business Bank’s smaller-business equity tracker, London’s share fell from 60% in 2024 to 57% in 2025. These percentages have different denominators and should not be read as one continuous series.
Foreign investment offers a separate signal. EY counted 155 UK software and IT services inward-investment projects in 2025, making the UK Europe’s leading destination for these projects despite a 4% fall in UK volume. London secured 85 tech projects; its project volume fell 12%. Project counts describe locations and project numbers, not the value of VC funding or equity raised by UK startups.
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The original March 2024 report concerned investment in 2023. It cited Yorkshire firms’ investment rising 20% to £200 million, Welsh startups raising more than £113 million (up 8.7%), and a survey in which more than half of founders reportedly said funding availability hindered growth. Those are period-specific findings, not current regional totals. The report also cited a KPMG estimate that London VC funding fell by more than half in 2023; that does not establish a similar fall in 2025. The original 2024 report
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do the regional gains show a lasting shift?
Not on their own. The Bank’s 2025 results show meaningful gains in several regions, but the concentration in a small number of large deals makes it difficult to infer broad-based growth. The same tracker reports that early-stage seed deal numbers fell 27% and venture-stage deal numbers fell 13%. A higher total investment value can coexist with fewer deals when a small number of rounds are especially large.
Fundraising by venture funds is another part of the picture: UK Private Capital reports £2 billion raised by 42 funds in 2025, compared with £8 billion invested into UK venture-stage businesses. The measures refer to different flows of capital and should not be conflated. Together with the fall in smaller-business equity and early-stage deals, the figures suggest a market with strong headline startup VC growth but uneven access and concentration—not proof that regional funding has durably overtaken London.
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