UK AI startups secured a record-breaking $2.4 billion (£1.7bn) in venture capital during the first half of 2025, accounting for 30% of all UK VC investment, an all-time high, according to fresh analysis from HSBC Innovation Banking UK and Dealroom.

The latest UK Innovation Update reveals that AI has been a magnet for private capital over the last few years, with funding more than doubling since 2022, when OpenAI first launched ChatGPT.

According to the report, this surge reflects the maturity of the UK’s AI ecosystem and its widening applications across diverse industries, from personalised medicine to shipping technology. 

Some of the largest rounds in the first half of 2025 included AI drug discovery company Isomorphic Labs $600 million (£439m) raise, genAI media platform Synthesia’s $180 million (£131.7m) Series D funding, and autonomous shipping technology startup Orca AI raising $72.5 million (£53m) at Series B.

Dealroom’s analysis found that UK companies raised more than $8 billion (£5.8bn)  in venture capital over the first half of the year, up 3% compared to H2 2024, a near tripling of VC investment compared to ten years ago. 

Notably, UK startups have now attracted over $3 billion (£2.2bn) in funding every quarter for six and a half years straight, highlighting the sustained strength of the UK’s innovation economy.

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. 

Underlining the UK’s nationwide AI momentum, a total of 57 AI deals were closed outside of London, with startups attracting investment from smaller towns like Bude in Cornwall, Castlereagh in Northern Ireland, and Paisley on Scotland’s west coast.

Beyond London, the top regional hubs for VC funding over the first six months of 2025 were Cambridge (£329m), Oxford (£242m), Cardiff (£126m), and Glasgow (£77.5m).

The UK has also maintained its AI investment lead over Europe, with German firms raising $4.4 billion (£3.2bn) and French VC investment reaching $3.2 billion (£2.3bn), giving the UK a commanding 30% share of all European venture capital investment in the year to date.

The UK has now produced 188 unicorns, with Mubi and Oxford Ionics joining the ranks this quarter, and of these, 117 have already realised their $1billion plus valuations via exits.

Recommended reading

• VC Funding in Emerging Markets Fell 40% Last Year
• Edinburgh Ranks Among Top VC Hubs in New Report
• UK Tech Sector Secures a Third of European VC Funding in 2024

“It’s hugely exciting to see AI investment gathering pace, as new and varied use cases with real-world impact continue to emerge,” said Simon Bumfrey, head of banking at HSBC Innovation Banking.

“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.”

Looking elsewhere, health narrowly edged out fintech as the UK’s most funded innovation sector in H1 2025, with both securing around $2.3 billion (£1.6bn) in new funding, while enterprise software followed closely behind, attracting $1.9 billion (£1.3bn).

Notable megarounds this quarter came from fintechs such as wealth management platform FNZ raising $500 million (£366m), remittance payments startup Zepz’s $165 million (£121m) financing deal, and payments company Dojo securing $190 million (£139m) in equity from Vitruvian Partners.