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In the first half of the year, the worth of venture capital funding agreements in the UK decreased by 12% compared to previous periods.

Decrease in venture capital funding witnessed in UK during the initial half of 2025

UK investment funding deals decrease in value by 12% during the first half of the year
UK investment funding deals decrease in value by 12% during the first half of the year

In the first half of the year, the worth of venture capital funding agreements in the UK decreased by 12% compared to previous periods.

UK Venture Capital Landscape Experiences Downturn in H1 2025

The first half of 2025 saw a significant downturn in the UK's venture capital (VC) funding landscape, with a 14% decrease in deal volume and a 12% decline in deal value. According to data and analytics firm GlobalData, this decline is a result of investor caution amid ongoing economic uncertainties and challenging market conditions, leading to fewer deals, even though sectors like technology and healthcare still attracted interest [1][3][4].

The UK's VC landscape, while experiencing a downturn, remains a significant player in the global venture capital ecosystem, accounting for around 7% of the total number of VC deals announced globally in H1 2025 [1][3][4]. Despite the challenges, promising signs exist within the UK VC ecosystem, particularly in technology and healthcare sectors.

Global Comparison

Compared to other major markets, the US had a smaller decline, with a 4% year-on-year reduction in deal volume, maintaining its lead in both deal volume and value. China, on the other hand, experienced a more severe downturn, with deal volume falling by approximately 6% and deal value plummeting by over 40% in H1 2025 compared to H1 2024 [1][3][4].

Signs of Resilience and Recovery

In spite of the downturn, certain UK sectors like AI, healthcare, cleantech, and fintech continued to attract investment. Early-stage investments showed signs of rebounding with increased average deal sizes and investor focus on quality over quantity, signaling cautious optimism and a more supportive funding environment than in mid-2024 [2].

Notable Funding Rounds in the UK

Despite the decline in VC funding, some notable funding rounds took place in the UK. CMR Surgical raised $200 million, Verdiva Bio secured $411 million, Isomorphic Labs raised $600 million, and Rapyd raised $300 million in VC funding during H1 2025 [1][3][4].

In summary, the UK's VC downturn aligns with a global pattern in H1 2025, reflecting broader market caution rather than uniquely poor UK market conditions. The UK's relative decline is moderate compared to China's sharp drop and somewhat steeper than the US's smaller contraction [1][3][4]. The UK VC ecosystem continues to attract investor interest, indicating opportunities for growth.

The UK's venture capital landscape, despite a downturn in the first half of 2025, still attracts interest in sectors like technology and healthcare. Intriguingly, despite the decline, significant technology-focused businesses like Isomorphic Labs and Rapyd secured substantial funding rounds.

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