UK innovation businesses ended 2024 with a combined $1.2 trillion in enterprise value, according to new analysis from HSBC Innovation Banking UK and Dealroom.

This marks a 20% increase on 2023, and has increased by nine times in just a decade.

Half of this enterprise value lies in pre-exit companies, signalling potential for significant untapped value realisation in the form of acquisitions or public listings in 2025 and beyond.

In addition, nearly half of this value is from companies founded in the last 15 years.

This growth has helped to drive substantial job creation within the sector, both at home and abroad. Startups with a HQ in the UK now employ over 1.8 million people, double the level of 2020.

The European Perspective 

The UK remains Europe’s leading ecosystem and is the third largest in the world, behind the US and China.

Valued at $1.2 trillion collectively, the UK innovation ecosystem is worth more than the French and German ecosystems combined.

UK startups raised $16.2 billion in 2024, compared to $8.2 billion for Germany and $7.8 billion for France. The largest amount of funding was secured at the breakout stage, with series B and C rounds accounting for over $6.5 billion.

At the late stage, the UK minted 9 new unicorns in 2024, bringing the total to 181. This figure means the UK is now home to almost a third (31%) of European startups valued at over $1 billion. The founder flywheel is in full effect, with UK startups spawning dozens of new startups via staff turned alumni.

AI in Focus

UK AI focused venture backed businesses raised $4.2 billion in VC investment in 2024, a 31% increase from $3.2 billion in 2023. This meant that over a quarter (27%) of all venture capital was raised by AI startups in 2024, its highest share to date. AI companies closed 5 ‘mega rounds’ of over $100 million, including a $1.1 billion round from Wayve.

Fintech on Top

Overall, fintech was 2024’s most funded sector, attracting $3.9 billion in VC investment, retaking the top spot from climate tech in 2023. This was driven by significant rounds including Monzo ($448 million & $190 million) and WorldRemit ($267 million).

Health and Enterprise Software both raised $3.3 billion in VC investment in 2024, with Enterprise Software raising $1 billion in Q4 alone, 65% more than in Q3. The strong quarter was driven by megarounds for Lighthouse, NScale and Tessl.

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Investment Up

With more of the larger funds coming back to the market in 2024, UK-based venture capital firms raised $11.3 billion in dry powder, a 59% increase from last year’s $7.1 billion, signalling a strong future for UK VC investment.

Meanwhile, an increasing share of investment in UK startups is being driven by international investors, with 68% of funding rounds involving participation from overseas backers. This is particularly acute for late-stage rounds.

“The UK innovation economy remained resilient in 2024, achieving record enterprise value and driving significant job creation across the ecosystem,” Simon Bumfrey, CEO at HSBC Innovation Bank UK, said.

“AI continues to thrive, setting the stage for a wave of disruptive commercial solutions across the vast majority of sectors.

“With half of the UK’s enterprise value concentrated in pre-exit companies and dry powder levels reaching near-record highs, the commitment and confidence from domestic and international investors towards UK innovation businesses is strong.

“As we look to 2025, we remain committed to partnering with firms across the ecosystem to support and accelerate growth.”