In the recently published UK ScaleUp Investment Report, comprising VC data from Sifted, extensive scaleup founder and investor surveys. This report highlights how the UK has all the ingredients to build world-leading businesses in key industries, but many potential scaleups continue to struggle accessing the capital and support to drive their development.
Contradictions?
Four of the world’s top ten universities, but only three of the top 100 R&D companies. Our venture capital market is leading in Europe, and the third largest globally, (behind US and China) yet annually less than 600 companies access Series A-B funding (£2-20m). Over £17 billion invested in innovative UK companies in 2025, but just 22% of this capital finds its way into our emerging scaleups (£3.8bn). World-leading in many technology sectors, yet we have 65 unicorns (compared to the USA’s 1,000+).
Equity gap is a reality
Fewer than 500 UK companies raised a Series A round (£2-10m) in 2025, and only 110 raised Series B (£10-20m),
93% of seed-funded startups are failing to secure follow-on funding to scale, with only 7% raising a subsequent VC round (“Series A”).
This crunch point in the £2-20m funding bracket, means promising future scaleups falter; funding becomes harder to secure, momentum slows and scaling ambitions stall.
Investment in UK startups in this range grew +2.6% in 2025, behind France (+9.5%), the Nordics (+6.7%) and Germany (+5.2%). Other European ecosystems are fixing this bottleneck faster, strengthening their pipeline of startups to scaleups.
Founders’ perspective
Against this backdrop it’s no surprise that the majority of founders (83%) are not highly confident about securing scaleup venture capital at Series A and B.
Change is coming
But there is still hope. 63% of founders report high confidence in their ability to scale.
Greater collaboration across the ecosystem is being organised, to solve this access to venture funding issue.
There is new money being made available as part of the Government’s growth agenda:
- Changes to investment thresholds for tax incentives (EIS and VCT)
- Improvements to the EMI scheme aimed at attracting and retaining key talent
- New capital from British Business Bank, into more funds.
- £3.6bn of Series A-B invested into less than 600 companies. Raising scaleup investment is a precision task, requiring skilled preparation. Funding is there for companies able to show the right data and share the right vision.
- New funding is available from British Business Bank, and an increasing number of new funds it is backing.
- EIS/VCT rule changes mean founders can raise more – and over a longer period – from these (traditionally earlier stage) investors, as Government doubled the amount companies can raise through these schemes (from £5m to £10m)
- Increased EMI limits help founders attract and retain more senior talent
We can look ahead with cautious, but growing, optimism for the year ahead for scaling companies from across the entirety of the UK, irrespective of background or region, having improved access to scaleup investment.
