Record AI investment drives strongest UK startup funding since 2022

UK startups and scaleups raised $17bn (£12.7bn) in venture capital funding during the first half of 2026, marking the strongest opening to a year since 2022 and a 102% increase on H1 2025, according to new analysis from HSBC Innovation Banking UK and Dealroom.

Growth was driven by record levels of AI investment, renewed momentum in late-stage funding and continued strength across deep tech and life sciences. The UK attracted 39% of all European venture capital investment during the period and raised more funding than the next three largest European markets combined.

AI remained the defining theme of UK venture capital investment in the first half of 2026, with AI startups raising a record $12.6bn (£9.4bn) – accounting for nearly three quarters of all venture capital invested in the UK. Funding was more than four times higher than H1 2025 and almost four times the previous H1 peak recorded in 2022.

AI companies secured 19 of the UK’s 28 megarounds during the first half of the year and accounted for all four $1bn (£750m) funding rounds completed during the period.

Enterprise software attracted the highest levels of AI investment by raising $5.2bn (£3.9bn), followed by health at $2.6bn (£1.9bn) and hosting at $2.1bn (£1.6bn).

The UK also secured 41% of all European deep tech and life sciences funding during the first half of the year, up from 23% in H2 2025.

UK companies raised $10.3bn (£7.7bn) across deep tech and life sciences during the period, with major rounds across semiconductors, quantum computing and biotechnology demonstrating the breadth of innovation emerging from the UK’s research and startup ecosystem.

A surge in late-stage funding drove venture capital investment during the first half of the year, with late-stage rounds accounting for 68% of all capital raised, up from 42% a year earlier and above the European average of 59%.

UK startups completed 28 megarounds of more than $100m (£75m), including four funding rounds exceeding $1bn (£750m) – the largest raise coming from Isomorphic Labs at $2.1bn (£1.6bn).

The UK remained Europe’s leading destination for venture capital investment in H1 2026, recording the strongest year-on-year funding growth (102%) among Europe’s largest venture capital markets.

Accounting for 39% of all European venture capital investment, the UK attracted more funding than France, Germany, Sweden and Switzerland combined.

“The first half of 2026 demonstrates the continued strength of the UK’s innovation ecosystem, with record levels of investment reflecting growing confidence from both domestic and international investors,” says Emily Turner, CEO at HSBC Innovation Banking UK. 

“What is particularly encouraging is how AI is increasingly being applied across sectors. We’re seeing it create new opportunities in sectors from life sciences and deep tech to enterprise software, while helping companies compete on a global stage.”