Startup funding in the UK faced a 19% drop in 2024’s first quarter, with late-stage investments taking the hardest hit.

This is according to new research from Tracxn which found that British startups as a whole raised $2.5bn in the year’s first quarter, a drop from Q4 2023’s $30.9bn (£24.57bn).

Late-stage startups took the largest hit, according to the data, and only managed to gain 33% less funding than at the end of 2023.

Early-stage startups funding also dropped, but only 7% from last quarter, but this also represented a 24% year-on-year decrease in funding.

When looking specifically at seed investments, however, there were signs of growth. Seed investments were up 12% compared to 2023’s last quarter, pointing to some potential germination among innovators in their earliest stages.

However, the $288m (£229.03m) of seed funding raised in the first quarter of 2024 do represent a drop of over a quarter (27%) from the beginning of 2023.

The mixed bag results could spell problematic for the UK’s ambitions to become a scale-up powerhouse as startups compete to stay afloat.

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While the UK currently accounts for around a third of all European unicorns – tech companies valued at $1bn – the UK government aims for the UK to account for half of all tech unicorns in Europe.

Despite the drop off from 2023 in investment, the UK still the third most funded tech industry in the world, falling only behind China and the US, making it the most funded tech industry in Europe.