The UK tech sector is now worth £1 trillion, according to the latest report from HSBC Innovation Banking UK and Dealroom.
The analysis marks a 20% jump since 2023 and a nine-times increase in the last decade.
Half of this enterprise value lies in pre-exit companies, the report found, which it said signals potential for significant untapped value realisation in the form of acquisitions or public listings in 2025 and beyond.
Startups with a HQ in the UK now employ over 1.8m people, double the level of 2020.
The UK remains Europe’s leading ecosystem and is the third largest in the world, behind the US and China. The UK tech sector is worth more than the French and German ecosystems combined.
UK startups raised $16.2bn in 2024, compared to $8.2 bn for Germany and $7.8bn for France. The largest amount of funding was secured at the breakout stage, with series B and C rounds accounting for over $6.5bn.
At the late stage, the UK minted nine new unicorns in 2024, bringing the total to 181. This figure means the UK is now home to almost a third (31%) of European startups valued at over $1bn.
Rise of AI
UK AI focused venture backed businesses raised $4.2bn in VC investment in 2024, a 31% increase from $3.2bn in 2023.
This meant that over a quarter (27%) of all venture capital was raised by AI startups in 2024, its highest share to date. AI companies closed 5 ‘mega rounds’ of over $100m, including a $1.1bn round from Wayve.
FinTech back on top
Overall, FinTech was 2024’s most funded sector, attracting $3.9bn in VC investment, retaking the top spot from ClimateTech in 2023.
This was driven by significant rounds including Monzo ($448m & $190 m) and WorldRemit ($267m).
Health and enterprise software both raised $3.3bn in VC investment in 2024, with the latter raising $1bn in Q4 alone, 65% more than in Q3. The strong quarter was driven by megarounds for Lighthouse, NScale and Tessl.
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Dry powder & international investment
With more of the larger funds coming back to the market in 2024, UK-based venture capital firms raised $11.3bn in dry powder, a 59% increase from last year’s $7.1 billion, signalling a strong future for UK VC investment.
Meanwhile, an increasing share of investment in UK startups is being driven by international investors, with 68% of funding rounds involving participation from overseas backers. This is particularly acute for late-stage rounds.
Simon Bumfrey, CEO, HSBC Innovation Banking UK said: “The UK innovation economy remained resilient in 2024, achieving record enterprise value and driving significant job creation across the ecosystem. AI continues to thrive, setting the stage for a wave of disruptive commercial solutions across the vast majority of sectors.
“With half of the UK’s enterprise value concentrated in pre-exit companies and dry powder levels reaching near-record highs, the commitment and confidence from domestic and international investors towards UK innovation businesses is strong. As we look to 2025, we remain committed to partnering with firms across the ecosystem to support and accelerate growth.”
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