What's next for UK tech?

Emerging Growth Insights and the Fast 50 2025

General economic assessment 

In recent years, global investment has declined. Escalating trade tensions, higher borrowing costs, and macroeconomic challenges have all contributed to these developments. In 2024, foreign direct investment (FDI) in Europe declined by 58% and 29% in Asia, while the US saw a 23% rise in FDI influenced by an influx of semiconductor projects across the country. Although the UK’s tech sector is valued at over $1tn, it has not been immune to the headwinds shaping global investment.

Since 2020, high-growth tech companies have raised £122b in equity investment, making up the majority of the £143b secured across the UK’s high-growth ecosystem. Investment activity has subdued following the record highs of 2021, with high-growth companies raising less investment year-over-year. While this partially reflects a market correction, it also highlights the impact of regulatory challenges and government support on investment trends. Sectors such as pharmaceuticals are experiencing declines, with many large companies halting investments in the UK due to concerns over policy and support. These pressures have also been visible in the IPO market, where international listings, particularly the US, have attracted some of the UK’s most innovative firms, raising questions about the competitiveness of London’s public markets.

Technology investment continues to be a central focus of economic policy, with government measures designed to improve the investment environment and strengthen the conditions for growth. The government’s industrial strategy sets out a ten-year plan to improve the investment environment and strengthen the conditions for growth. The strategy emphasises advanced manufacturing, clean energy, AI, and other areas of technological development. It also highlights the importance of aligning innovation funding with the availability of public and private capital, so that growing companies can move from venture finance to successful public listings. Reinforcing this, the UK-US Prosperity Tech deal is expected to create 7,600 jobs through £150b of commitments from major tech firms, including Microsoft’s £22b over the next four years and Google’s £5b over two years to expand a Hertfordshire data centre.

Despite a decline in investment, the UK’s high-growth ecosystem remains a magnet for significant foreign interest from both businesses and investors. US-based fintech, Liquidity, has announced it will launch its European headquarters in London as part of its plans to invest an additional £1.5m into cutting-edge enterprises over the next five years.

The outlook for global investment remains uncertain. However, the UK retains a strong base of technology companies and research capacity. The challenge for policymakers will be to maintain international confidence while ensuring that the industrial strategy, capital markets, and innovation policies are integrated. Success will depend on whether commitments from large multinational companies and investors translate into consistent deal flow, competitive public listings, and long-term economic growth. While investment is unlikely to return to the levels of 2021, developments in the final quarter of 2025 will provide an important indication of the resilience of the ecosystem and the effectiveness of current measures.

Regional overview 

There are more than 34,000 high-growth tech companies in the UK, up from 25,348 in 2020, reflecting the sector’s continued advancement. London remains a central tech hub, with 13,719 businesses. These companies are supported by London’s business population density, access to skilled talent, and financial resources. Oxford and Cambridge, two-thirds of the Golden Triangle, have maintained their position as a key centre of activity. Proximity to London, combined with leading universities and research institutions such as Oxford Technology Park, has helped sustain a strong pipeline of tech spinouts emerging from the cities.

Technology ecosystems outside of London and the South are also expanding. The North West is home to 2,426 companies. Initiatives such as Digital Manchester play an important role in encouraging startups. Manchester has a growing tech ecosystem, comprising 661 high-growth tech firms that have generated £4.91b in turnover and employ almost 27,000 people. Scotland is home to 2,102 companies and has become a leading video game hub. Clusters in Dundee and Edinburgh have produced companies such as Build a Rocket Boy, which develops large-scale interactive entertainment and has raised £246m across six funding rounds.

Investment in high-growth tech companies by region 

Between 2020 and Q3 2025, high-growth UK tech companies raised £121b in equity investment, averaging £4.16m per deal. London continues to lead, accounting for 63.3% of total capital raised and over half of all completed deals. The South East and East of England follow, attracting £11.4b and £9.15b respectively. The concentration of resources, skilled talent, and networks in these regions makes them natural centres for larger deal sizes and investment activity.

In the first three quarters of 2025, tech companies raised £13.3b, with London-based companies securing the two largest deals. Media platform DAZN raised £790m backed by Surji Sports Investment, while communications company CityFibre secured £500m in June 2025 from various backers, including Goldman Sachs Alternatives.

Beyond London and the South, investment in regional tech ecosystems is increasing. Scotland has seen notable progress, with equity investment rising from £388m in 2020 to £875m in the first three quarters of 2025. This growth reflects the impact of targeted initiatives. The Scottish government has pledged £5m to boost advanced manufacturing in the region and has committed more than £2m to support clusters outlined in its Innovation Strategy in sectors including Space, Robotics, and semiconductors. By targeting high-potential industries in this way, these measures are helping to draw capital into Scotland and contribute to a more balanced distribution of investment across the UK.