UK Innovation Update: Q2 2025
By Kyle Gregorowski, Staff Writer at HSBC Innovation Banking
Key Insights
UK startups raised over $8 billion in H1 2025—3% up from H2 2024.
AI startups captured $2.4 billion, ~30% of total UK VC deals.
The UK received ~30% of all European VC in 2025, making it the continent’s #1 innovation destination.
Though London dominates, 32% of AI deals (57 in total) happened outside capitals—including Oxford, Cambridge, Cardiff, Glasgow.
HSBC’s Q2 2025 Innovation Update outlines the UK’s dominance in Europe’s innovation landscape. Startups raised over $8 billion in just six months—driven largely by AI, which accounted for 30% of total VC investment.
Behind the headline: UK startups have now pulled in over $3 billion in investment every quarter for more than 26 straight quarters, and the innovation ecosystem is valued at an estimated $1.3 trillion. Over half of that comes from companies founded since 2010—highlighting scale and resilience.
While London remains the primary hub (68% of AI financing), regional strength is growing. Oxford, Cambridge, Cardiff, and Glasgow contributed significantly—collectively capturing 32% of all UK AI investment rounds. This underscores expanding depth beyond the capital.
As Simon Bumfrey, Head of Banking at HSBC Innovation Banking UK, notes: the country is not just a leader in Europe, it’s accelerating at a pace that positions it at the forefront of global AI and tech innovation.
