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UK venture capital funding surges despite volume fall

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2 May 2025

Fundraising jumps as investors focus on larger deals. Mark Dunne reports.

Fundraising jumps as investors focus on larger deals. Mark Dunne reports.

Venture capital funding in the UK jumped by almost 40% in the first quarter, despite there being fewer deals, according to analytics specialist Global Data.

The market reached $4bn (£2.9bn) during the period, but dealflow was 13% lower than in the opening three months of 2024, which points towards a trend for larger deals.

The decline in volume is in line with the global trend, said Aurojyoti Bose, Global Data’s lead analyst. “However, the growth in value tells a different story, indicating a shift in investor sentiment towards fewer, but larger funding rounds.

“While the decline in deal volume reflects a cautious approach from investors, the growth trend in terms of value reflects a growing preference for substantial capital infusions into start-ups that demonstrate proven business models and strong growth potential,” he added.

The UK accounted for more than 6% of the global venture capital market’s value during the first quarter. Interestingly, it held a similar share of the announced deals.

Activity in the first quarter, gives Bose optimism of more to come.

“While the initial months of 2025 have presented a mixed picture, the increase in deal value signals a robust appetite for investment in high-potential start-ups.

“As the market adjusts to evolving conditions, the focus on larger, more strategic investments may well position the UK as a resilient player in the global VC ecosystem.”

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