UK venture funding surged into AI in 2025, with investment increasingly concentrated in the UK’s largest and most proven scaleups, according to NatWest’s inaugural Future of UK Innovation report, published today in partnership with PitchBook.

UK startups raised £17.5bn across more than 2,000 deals last year, even amid a challenging macroeconomic backdrop. The report reveals that investors are placing bigger bets on fewer businesses: rounds over £25m made up more than 70% of the funding — the highest share in a decade — signalling a market where proven business models and demonstrable traction matter more than ever.

NatWest’s research also shows that AI is now one of the defining forces in the UK innovation economy. AI startups raised more than £6bn - over a third of all UK venture capital - helping create five new unicorns and driving some of the strongest exit activity in the market, with a total of 67 exits worth £4bn. This rapid surge in AI activity underscores how decisively capital is shifting toward technologies with clear commercial readiness and global scaling potential.