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VC investment in UK firms still below pandemic-era peak, but is the tide turning?

15 January 2024
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Business leaders across the South West say that the cost of living crisis is the top risk to their organisation’s success

Investment in UK start-ups fell to £16.71 billion in 2023, down from £24.55 billion the previous year. This was just over half of the peak fundraising in 2021 a report by HSBC Innovation Banking and Dealroom has revealed.

New British companies raised record amounts of funding during the COVID pandemic, with venture capital investment at £32.16 billion in 2021, but dropped in the second half of 2022, according to the report.

But there are signed of things rallying for venture capital investment into UK companies, the report said, as companies raised £9.88 billion in the second half of 2023, a 46 per cent increase on the previous six months.

Over the past decades, the United Kingdom has become one of the world’s most established startup ecosystems thanks to a variety of factors including a wealth of world class education hubs, thriving job market, and a beneficial regulatory environment.

As of 2020, the UK startup ecosystem was now worth more than $1.1T as of 2023, making the UK the 3rd most valuable startup ecosystem globally, according to Dealroom.


Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe.

After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts.

She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.

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