The State of UK Investment
Q1 2025

Q1 2025 marks the second-lowest quarterly number of deals since 2014. It may be that we need to get used to seeing fewer deals and less investment across the UK overall, and ask ourselves: is this the new normal?

The headlines

Q1 2025 tells a mixed story. Deal activity fell to the second-lowest level since 2014, with a 7.7% drop in the number of deals and a 9.5% decline in investment compared to Q4 2024. However, it performed better than Q3 2024, which had only 1,112 deals and £3.44b invested. There were also strong gains in investment across several sectors and UK regions compared to last year.

Comparing year-on-year there has been an even sharper decline in both deal number and amount since Q1 2024. Given the 8.6% year-on-year decline in capital investment announced in our annual report, The Deal 2024, it is not surprising that this downward momentum has continued into 2025.

“Investor caution, tighter capital conditions globally, and a shift toward risk-adverse investments are reshaping the landscape.”

It may be that we need to get used to seeing fewer deals and less investment across the UK overall, and ask ourselves: is this the new normal?

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Where is investment being made in the UK?

As expected, London secured the highest number of deals and the most investment in Q1 2025 — 48% and 62% of the total numbers, respectively. While London continues to dominate, the number of deals going to companies based in the capital was 12% lower than Q4 2024. This was echoed in our annual report, which reported a 3.5% year-on-year drop in London deals, reaffirming the indication that we may be seeing a rebalancing of deals across the UK.

The regions of England that saw the most growth in the number of deals from the previous quarter are the West Midlands (23%) and Yorkshire and The Humber (18%). Overall the number of deals has increased in five out of the nine English regions.

There’s also some good news looking at the amount invested in English regions. There was a 90% uptick in the amount invested in the Yorkshire and The Humber area, and an 80% increase in the amount invested in companies in the East of England.

However, majoratively, we’ve seen a decrease in the amount invested in English regions. This isn’t surprising, given the decrease in the total number of deals and amount invested across the UK in Q1 2025 — we’re seeing lower investment trickle down to most regions.

But good news for Scotland…

While there has been a drop in the number of deals in Scotland (by 6%), there is some good news — the value of investment into Scottish companies has risen by a huge 108% from Q4 2024 to Q1 2025. The country secured 7% of all deals across the UK and 5% of the amount raised.
Investment into Scotland
has risen by

108%

The situation in Northern Ireland also appears to be relatively positive, with a 14% increase in the number of deals compared to the previous quarter, and just a 1% decrease in the amount invested. In line with previous figures for Northern Ireland, this makes up 1% of both the number of deals and the amount invested across the UK. Wales had the exact same number of deals in Q1 2025 as it did in the previous quarter — 28 in total. Investment in Wales has decreased by 7%, and overall, the country raised £57.6m in Q1 2025, accounting for 2% of the total raised across all UK regions.

Which industries are seeing the most investment?

As usual, companies in the software and IT, telecoms, and data industries received the most investment in Q1 2025, securing 68% and 52% of the total amount raised respectively. The high degree of overlap of these industries, with companies frequently operating in both, explains why these figures are so dominant.

The creative, media and publishing industry had the most significant growth in the number of deals — 12%. The amount invested in this industry also increased by 19%, which can be partly attributed to large deals secured by ElevenLabs and Genius Sports Group.

Safety and security also performed well this quarter. Although the number of deals in this industry increased by only 2%, the amount invested rose sharply by 49% to £403m.

We also saw growth in the amount invested in several other industries, including environment, agriculture and waste, information technology, telecommunications and data, and software.

Things become more interesting when looking at emerging sectors through our buzzwords. We have seen significant growth in the regtech industry, with a 100% quarter-on-quarter increase in the number of deals and 238% growth in the amount invested.

The amount invested in digital security increased by a significant 435%, but the number of deals remained relatively low at 33. This huge amount of growth can be attributed to several large deals, such as the Quantexa deal, highlighted in our top announced fundraisings, which raised £137m.

This is reflected in other niche industries, such as adtech, eHealth, and martech, where several large deals have contributed to significant growth.

The number of deals fintechs secured grew by 3%, with the amount invested into these companies growing by 31% to £590m — fintech’s highest quarter since Q2 2024. Investment into cleantech companies increased by 7% to £433m — also the highest in this sector since Q2 2024 (though the number of deals in cleantech companies decreased by 15% from the previous quarter).

Another record quarter for AI

Artificial intelligence companies have seen the highest-ever quarter for the amount invested: £1.59b. This represents a 28% increase from the previous quarter (£1.24b), following already impressive investment in this sector.
Investment into AI companies
£1.5b
As we saw in our annual report, The Deal 2024, the amount raised by AI companies more than doubled in 2024, from £1.72b in 2023 to £3.55b. This momentum has continued into 2025. In fact, all of the top five announced fundraisings in Q1 2025 were for companies in the AI industry, or include an AI element in their product or service.

Resurgent investment into SaaS

There has also been sustained and significant investment in SaaS companies. Our annual report revealed that investment in the industry increased year-on-year from 2023 to 2024, and we’re seeing that trend continue in 2025. While the number of deals closed by SaaS companies rose by a modest but still notable 7%, the total amount invested surged by an impressive 41%, reaching £1.68b.
Total amount invested into
SaaS companies grew by
40%

Let’s break it down by stage of evolution

Examining deal activity by stage of evolution, as usual Seed stage companies led the way, securing 579 fundraisings — the highest number across all stages. On the flipside, however, Seed funding saw a significant decline in the amount invested compared to the previous quarter. Seed stage companies raised £520m in Q1 2025, a sharp decrease from £1.01b in Q4 2024. Despite attracting the highest number of deals, Seed stage companies received the least amount of investment overall. While lower in deal volume, Venture stage companies had the most amount invested overall — £1.58b across 392 deals. Established stage companies followed behind with £940m invested through just 84 deals.

So, what does this mean overall for the UK economy?

Whilst the number of deals in Seed stage companies dropped by only 4.6%, the total amount raised by these companies nearly halved compared to the previous quarter. This indicates that while early-stage businesses are still attracting attention, investors are opting for smaller, lower-risk investments.

In contrast, Venture and Established stage companies attracted the most capital despite fewer deals, suggesting a more selective, ‘quality-over-quantity’ approach. Overall, this could mean we’re seeing a two-speed market: one where early-stage funding remains active but lean, while mid-to-late stage companies are securing fewer but significantly larger rounds.

“We’re seeing a two-speed market: one where early-stage funding remains active but lean, while mid-to-late stage companies are securing fewer but significantly larger rounds.”

Announced Deals
Top five

Isomorphic Labs

Raised:
Deal date:
Location:
Industry:

£464m
31 March 2025
London
Application software; biotechnology

Raised: £464m
Deal date: 31 March 2025
Location: London
Industry: Application software; biotechnology
Isomorphic Labs has developed a drug design platform that enables companies to utilise AI models to design pharmaceuticals.

ElevenLabs

Raised:
Deal date:
Location: Industry:
£145m
30 January 2025
London
Application software; languages, translation and interpretation

Raised: £145m
Deal date: 30 January 2025
Location: London
Industry: Application software; languages, translation and interpretation

ElevenLabs operates a platform that uses AI to automatically translate audio and video content into different languages.

Ori

Raised:
Deal date:
Location:
Industry:

£140m
16 February 2025
London
Application software; data management

Raised: £140m
Deal date: 16 February 2025
Location: London
Industry: Application software; data management

Ori provides AI infrastructure and cloud solutions for training, deploying, and managing machine learning models.

Quantexa

Raised:
Deal date:
Location:
Industry:

£137m
4 March 2025
London
Application software; banking

Raised: £137m
Deal date: 4 March 2025
Location: London
Industry: Application software; banking

Quantexa uses AI to unify data and help organisations such as banks make smarter decisions, detect financial crime, and manage risks.

Cera

Raised:
Deal date:
Location:
Industry:

£122m
13 January 2025
Essex
Application software; hospitals and clinics

Raised: £122m
Deal date: 13 January 2025
Location: Essex
Industry: Application software; hospitals and clinics

Cera provides home care, telehealth consultations, and prescription services, all of which are managed through a mobile app.

Unannounced Deals
Top five

In Q1 2025, 65% of deals went unannounced — the highest proportion since Q1 2024. Tracking unannounced fundraising is crucial because it reveals hidden investment activity, offering a more complete and accurate picture of the market.

How does Beauhurst find unannounced fundraisings?

At Beauhurst, we track company filings daily to uncover fundraises that aren’t publicly announced, giving us a comprehensive view of the UK fundraising landscape.

However, filings can be submitted months after a deal closes, so some unannounced fundraises completed within the quarter may not be visible at the time of reporting.

GRIDSERVE

Raised:
Deal date:
Location:
Industry:

£55.8m
20 March 2025
Buckinghamshire
Application software; renewable energy

GRIDSERVE is a sustainable energy company that develops and operates solar farms and a nationwide EV charging network, powered by 100% renewable energy

Crystal Palace Football Club

Raised:
Deal date:
Location:
Industry:

£37.6m
10 January 2025
London
Sports clubs

Crystal Palace Football Club (CPFC) runs the Crystal Palace football team, which is a professional football team based in South London.

GB Bank

Raised:
Deal date:
Location:
Industry:

£34.8m
17 February 2025
London
Banking

GB Bank operates a bank that’s aimed at providing property development finance to typically underserved regions.

Storm Therapeutics

Raised:
Deal date:
Location:
Industry:

£27.7m
23 January 2025
Cambridgeshire
Biotechnology

Storm Therapeutics is a University of Cambridge spinout that is pioneering RNA epigenetic therapies to treat cancer and other diseases.

Abingdon Software Group

Raised:
Deal date:
Location:
Industry:

£25.0m
18 March 2025
London
Application software; technology consultancy and IT telecommunications support

Abingdon Software Group develops and acquires specialised software solutions for sectors including healthcare, fitness, logistics, public services, and telecommunications across Europe and the U.S.

Methodology

Data for this report was finalised on 29 April 2025. To be included in our analysis, an investment must be: Dated between 1 January 2014 and 31 March 2025; Secured by a non-listed UK company. Data for this report includes announced and unannounced fundraisings combined.

About the authors

Lily Ruaah
Author
Lily is a Content Associate and professional writer, with over seven years of experience. She is responsible for content creation at Beauhurst and specialises in both creative and analytical writing. Prior to this, she worked in SEO and completed an MA in Creative Writing.
Christopher Landry
Design
Christopher is Beauhurst’s Senior Designer, specialising in the creation of strategic, compelling, and well-crafted brand and marketing materials. Christopher has over 15 years experience and has helped brands across Australia, Canada, Europe, and the US.