• Innovation & Transformation
    • The Future of Banking

Q1 UK innovation update

  • 8 mins
  • Article

Explore the latest trends shaping the UK innovation economy

Our quarterly innovation update, developed in partnership with Dealroom, is an essential view of the investment trends shaping the UK innovation economy.

Raised by UK startups in Q1 2024
Went to Fintechs in Q1 2024
Increase in VC investment in Edinburgh

Green shoots prosper

The innovation economy continues to see positive momentum following a recalibration. UK VC investment is on a similar trajectory to 2019 and 2020, years that were second only to the outliers of 2021 and 2022.

Promisingly, early-stage VC was higher than the previous two quarters, underlining investor appetite for emerging innovation opportunities.

Fintech bounces back

In 2023, Energy surpassed Fintech to be the UKʼs most funded startup sector for the first time. Fintech has bounced back as the most funded sector in Q1, with investment totalling $1.4B. Quantum computing and semiconductors also attracted significant interest, likely due to their importance in advancing AI.

Innovation is everywhere

The UK remains the top destination in Europe for VC investment. Although London is the epicentre of this activity, exciting new innovation hubs continue to emerge.

Both Edinburgh and Brighton have made fast starts this year, with Cambridgeshire also attracting significant investment.

This data reflects a busy start to the year for the UK innovation ecosystem – from growth in investment in established and emerging areas like fintech and quantum computing to expansion of regional tech hubs across the length and breadth the country, there is much to celebrate. We remain optimistic and excited about UK innovation in 2024 and are committed to supporting and partnering with innovators, investors and the broader ecosystem.

Simon Bumfrey | Head of Technology and Life Sciences, HSBC Innovation Banking

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