Innovation
UK Innovation Update: Q2 2025
- Innovation
- Report
- 3 minutes read
Our UK Innovation Update for Q2 2025 – developed in partnership with Dealroom – provides an essential overview of the emerging opportunities across the local innovation ecosystem. The report confirms the UK’s position as the leading innovation nation across Europe, and describes strong and sustained growth, particularly in the AI space.
- UK companies have raised over $8B in venture capital in 2025, with VC investment up 3% in H1 2025 compared to H2 2024.
- UK artificial intelligence startups have raised $2.4B so far in 2025 – a record 30% of all UK VC raised this year.
- The UK has raised 30% of all European venture capital in 2025, retaining its position the #1 country in Europe for venture capital.
The UK continues its growth trajectory
The report confirms that the investment into UK innovation startups is still on a growth trajectory.
Despite a complex global backdrop, the H1 total is up 2.8x compared to a decade ago, with UK startups having raised over $3B every quarter, for 26 consecutive quarters.
That means that the UK innovation economy is worth a combined $1.3 trillion - with more than 50% of the ecosystem value comes from companies founded since 2010.
This ability to consistently build business that continue to attract significant investment speaks to the depth, maturity, and global relevance of the UK’s innovation ecosystem.
Sector spotlight: AI, health and fintech
Unsurprisingly, AI is at the forefront of the report.
AI-driven innovation startups raised $2.4B in H1 2025, with noticeable impact on Health and Fintech, the UK’s most-funded innovation sectors.
Both industries have raised over $2.3B in new funding in 2025, AI drug discovery, metabolic health, neurology and synthetic biology attracting significant interest in the health space.
Simon Bumfrey, Head of Banking, HSBC Innovation Banking UK"The UK is continuing to shine as the leading innovation nation across Europe with strong and sustained growth. No more is this evident than with artificial intelligence businesses, where talent, ambition and capital are accelerating the sector at incredible pace."
The innovation kingdom, united
Although London has confirmed its status as a global AI hub, the rest of the UK is also showing promising signs.
Of the 179 AI rounds raised in H1 2025 in the UK. 68% were raised in London, but 57 rounds were raised across the rest of the country. Outside of London, the most venture capital in the first half of the year has been raised in Oxford, Cambridge, Cardiff and Glasgow.
Any opinions expressed are merely opinions and not facts. All information in this document is for general informational purposes and not to be construed as professional advice or to create a professional relationship and the information is not intended as a substitute for professional advice. Nothing in this document takes into account your company’s individual circumstances. HSBC Innovation Banking does not make any representations or warranties with respect to the accuracy, applicability, fitness or completeness of this document and the material may not reflect the most current legal or regulatory developments. HSBC Innovation Banking disclaims all liability in respect to actions taken or not taken based on any or all of the contents in this document to the fullest extent permitted by law. Nothing relating to this material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
