UK surpasses combined H1 VC funding of Germany and France, latest figures show
In the first half of 2025, venture capital (VC) investments in UK AI startups reached an unprecedented $2.4 billion, accounting for 30% of all UK VC funding during that period. This is the highest share of AI VC funding in the UK on record, marking a significant increase in investment focus on AI technologies compared to a decade ago, when AI represented less than 13% of UK VC activity.
This surge in AI funding reflects the maturity and widening application of the UK’s AI ecosystem across various industries, including healthcare, media, and autonomous shipping. Notable funding rounds included Isomorphic Labs ($600 million), Synthesia ($180 million), and Orca AI ($72.5 million).
Comparatively, the UK raised more VC funds in H1 2025 than Germany and France combined, consolidating its position as the leading European hub for startup investments, especially in AI. London dominates within the UK, contributing 68% of AI funding rounds, but investment activity is gaining momentum nationwide.
In the European context, the UK leads in both total and AI-specific VC funding, with a total of $8 billion raised in H1 2025. Germany follows with $4.4 billion, while France is third with $3.2 billion. The UK's market share across European VC investment in the period stands at 30%.
The UK's AI sector has produced 188 unicorns, with quantum outfit Oxford Ionics joining the ranks this quarter. Of these unicorns, 117 have already realised their $1 billion plus valuations via exits.
Beyond AI, health tech and fintech both raised $2.3 billion in new funding in the UK, ahead of enterprise software which raised $1.9 billion. Simon Bumfrey, head of banking, HSBC Innovation Banking UK, stated that it's exciting to see AI investment gathering pace, with new and varied use cases emerging. Bumfrey also noted the diversity of innovative AI startups across the UK, not just in established tech hubs.
This data indicates a strong acceleration in UK AI startup funding relative to both previous years and other leading European countries, positioning the UK as a global leader in AI innovation.
[1] Tech Nation Report, H1 2025 [2] Sifted, AI in the UK: A record-breaking first half for VC investment, 30 June 2025 [3] TechCrunch, UK AI startups raised $2.4bn in VC funding in H1 2025, 1 July 2025
The increase in AI funding in the UK suggests a growing focus on artificial-intelligence technologies in various industries such as healthcare, media, and autonomous shipping. (Tech Nation Report, H1 2025)
The surge in fintech investments in the UK, alongside AI and health tech, underscores the country's position as a global hub for innovative technology and finance. (Sifted, AI in the UK: A record-breaking first half for VC investment, 30 June 2025; TechCrunch, UK AI startups raised $2.4bn in VC funding in H1 2025, 1 July 2025)
