Over the past decades, the United Kingdom (UK) has become one of the world’s most established startup ecosystems thanks to a variety of factors including a wealth of world class education hubs, a thriving job market, and a beneficial regulatory environment.
The UK startup ecosystem is now worth over $968B as of 2023, making the UK the 3rd most valuable startup ecosystem globally.
Venture Capital investment in the UK reached $31B in 2022, a 25% drop from 2021. While this is a significant drop from the heights of 2021, it is still 77% higher than in 2020.
Greater London continues to make up the larger share of the total VC investment, driving 70% of total investment in 2022.
For early stage investment, in 2022, London experienced a 17% drop against 2021, 2022 still saw a 10% growth in investment raised when compared to 2020.
Although London remains the top hub in the UK and where venture capital activity is most intensified, other regions are emerging throughout the country.
East Midlands, Northern Ireland, Yorkshire and the Humber have more than doubled in investment growth since 2020. This is partially driven by some larger investment rounds in startups such as The Access Group, Weev and Raw Charging respectively.
VC investment into the UK has seen significant growth across all stages over the years, with the highest growth in the Pre-Seed and Seed stages.
Pre-Seed investment into the UK has increased five fold since 2010 and a similar pattern is observed for Seed sized investment rounds.
Investment in later-stage stages, such as Series A, B, and C, have show a more gradual increase in investment, with investment rounds larger than $100M accounting for a large share of investment.
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The top three UK industries for VC investment in terms of total investment raised in 2022 are Fintech, Health, and Energy.
These three industries combined accounted for over half of total VC investment into the UK startup ecosystem for 2022.
When comparing industry investment for the UK and Europe, there is a higher degree of investment into Fintech within the UK while Transportation and Food related startups receive a higher proportion of investment in Europe.
Sources of capital
Over half of VC investment has come from sources outside of Europe such as the US and Asia.
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Over the past decade, VC firms have consistently made up between 40-50% of total funding into the UK startup ecosystem.
Other sources of VC investment into the UK comes from corporates, private equity firms, angel investors amongst others.
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Explore the data for the most active investors into the UK startup ecosystem as well as the most active UK based investors here on the Dealroom platform.
UK's most active investors
Most active investors in UK startups
New Funds raised
Explore the data on new VC firms headquartered in the UK here on the Dealroom platform.
After the peak in new unicorn creation in 2021, the creation of both new unicorn and future unicorns has slowed down significantly, signalling that new unicorns are once again becoming rare beasts.
The UK's startup ecosystem ranks 3rd globally in terms of VC investment raised, a position it has maintained since 2019 with the exception of 2021.
The UK leads in the European continent for VC investment, raising over double the amount compared to its closest European counterpart, France.
It's important to note that despite the challenging economic climate and the negative growth in VC investment compared to 2021, the UK ecosystem showed improved resilience when compared to half of the top 10 largest ecosystems including the United States, China and Germany.
When comparing individual ecosystems within the UK against its European counterparts, London leads the continent, raising more than Paris, Berlin and Munich combined for the year of 2022.
Other British hubs such as Oxfordshire, Cambridgeshire and Greater Manchester compare well against other European hubs and help the UK diversify their talent pool across the nation.