Venture Capital Update - VC investment in British startups and scaleups reaches £9bn in 2024
Venture on the rise
Venture capital is back on an upward trend. Our latest Venture Capital in the UK report showed the total amount raised by UK VC funds in 2024 reached £4bn, almost double the amount raised the previous year. While the total is swelled to some extent by the performance of some larger UK-based managers, it’s also encouraging to see an increase in the number of funds raised as well as the total investment across the UK.
This framing played a central part of the BVCA’s Accelerate Conference earlier this month, where the UK VC community came together to discuss the outlook for the industry. Key topics were explored, such as the impact of Trump on DEI & sustainability, the rise of defence tech, and how the venture model is evolving. Peter Kyle, the Secretary of State for Technology, took to the stage to assert the Government’s support for VC and UK tech, stating that “when you are held back, we know that our economy is held back”.
June will be a particularly important month for the Government, with the outcomes of the Spending Review, the Pensions Review, and the Industrial Strategy. Tech & investment are expected to be central to these announcements, as well as spending plans for bodies such as the British Business Bank.
In this month’s Venture Capital Update, we take a closer look at the growing importance of venture debt. This includes a must-read opinion article from Anthemis and our summary of the latest Global Venture Debt Report from Stride Ventures and Kearney. For anyone seeking further reading on the subject, the BVCA’s response to a recent government consultation on access to finance for small businesses outlines the importance of increasing awareness of venture debt funds as an important source of capital for SMEs.
Finally, this is one of the busiest periods for the venture community with events across Europe. If you want to meet with the BVCA team at SuperVenture (2-4 June) or London Tech Week (9-11 June), get in touch here.
Chris Elphick,
Head of Venture Capital, BVCA
Insight
Venture Debt: Why it’s attractive for founders, investors and the UK economy
Authored by Mei Lim, CFO and Sonia Powar, Venture Partner, Anthemis
This month’s Insight article focuses on the growth of the venture debt market. Co-authored by Mei Lim, the CFO of Anthemis & Sonia Powar, Venture Partner at Anthemis, who put forward the argument that despite the sectors rapid growth in the US, the UK venture debt market is still currently restrained by a series of barriers to investment. To rectify this, Lim and Powar suggest that the ongoing Mansion House reforms are a unique opportunity to include additional pathways to allow for venture debt investment and financing, ensuring that all UK investors can contribute and benefit meaningfully from all high-growth opportunities in the UK economy.
BVCA Round-Up
RESEARCH:
VC investment in British startups and scaleups reaches £9bn in 2024
A new report - Venture Capital in the UK 2025 - finds that the total amount invested in British businesses by VC funds, co-investors and financial institutions was £9bn in 2024 - a 12.5% rise compared to 2023.
The report shows that as of 2025, VC supports over 378,000 jobs across the UK - a 20% rise compared with 2023, backing over 9,000 businesses across the UK - 11% more than in 2023.
The report noted that VC funds managed from the UK in 2024 raised £4bn, almost double the amount raised in 2023 (£2.3bn). 2024 also saw a rise in the number of venture funds raising capital: from 44 in 2023 to 48 in 2024, demonstrating continued investor confidence in this type of investment.
The reports' policy recommendations include increasing limits on accessing funds through tax relief schemes such as the Seed Enterprise Investment Scheme and Venture Capital Trusts. The report also calls on government to expand the British Business Bank’s Nations and Regions Investment Funds to better support companies across the UK.
Read the report here. To learn more about BVCA research into private capital, please contact Suzi Gillespie, Head of Research.
POLICY:
Mansion House Accord a potential step towards greater pension fund investment in venture capital
The BVCA welcomes the new Mansion House Accord, which has secured commitments from seventeen of the largest workplace pension providers in the UK to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with 5% of the total allocated to the UK.
The Accord builds on the 2023 Mansion House Compact, which saw several DC schemes commit to investing 5% of default funds in unlisted equities by 2030. Responding to the announcement, chief executive Michael Moore, said: “Right now, it is primarily overseas pension savers’ retirement funds that are benefitting from breakthroughs made by innovative British companies. UK venture and growth funds support the development of fast-growing British companies operating in sectors of the future such as life sciences, AI and net zero. Greater investment in VC and growth capital funds will help more ambitious businesses, as well as deliver strong returns for pension savers.”
These developments follow extensive engagement between the private capital and pensions industry. The BVCA-convened Pensions and Private Capital Expert Panel recently published a report which includes recommendations to overcome many of the longstanding barriers to increasing UK pension fund investment in private capital.
For more information, contact Policy Manager, Access to Capital, Karen Hurst.
ACCELERATE:
Technology Secretary commits government to breaking down barriers to investment
Speaking at the BVCA’s Accelerate Conference, the Secretary of State for Science, Innovation and Technology, Peter Kyle MP said the Government was committed to making the UK a more investment ready destination for venture capital in order to channel greater investment into the industry through a series of government reforms.
Shadow Business Secretary, Andrew Griffith, spoke about the need for the new Government to continue with reforms initiated under the previous administration to encourage greater pension fund investment into venture capital.
Discussions at the event covered a wide array of topics, including: how to accelerate the UK’s spinouts, the future of defence tech in the UK and Europe and how developments in the US could affect the UK and Europe’s Diversity and ESG agendas. The full set of photos from the conference can be found here.
For more information about the BVCA’s work relating to Venture Capital, please contact Chris Elphick, Head of Venture Capital.
POLITICS:
Minister cites BVCA and Level 20 research on diversity in UK venture capital
The Minister for Services, Small Business and Exports, Gareth Thomas MP called out improvements in representation within the venture capital industry during a Westminster Hall debate in Parliament.
During the debate about access to venture capital for individuals from ethnic minorities and other underrepresented backgrounds, the Minister cited evidence from Diversity in UK Private Equity and Venture Capital 2025, but stressed the importance of progress continuing.
The discussion was led by Liberal Democrat Business Spokesperson, Sarah Olney MP, who emphasised the importance of making the UK’s thriving venture capital sector more inclusive. Olney praised the importance of the sector, saying “venture capital in the United Kingdom is a unique and valuable industry that supports many smaller innovating companies with high growth potential.”
The MP also quoted the BVCA report, stating that “venture investment helps turn ideas... into thriving businesses”, but warned that the current system disproportionately disadvantages founders from underrepresented backgrounds.
Both speakers called for continued efforts to close these gaps. For more information, please email Head of Public Affairs, Juliette Gerstein.
DE&I:
BVCA welcomes launch of Diversity VC strategic operations toolkit
The BVCA has welcomed a new resource developed by Diversity VC, which sets out a series of suggested actions, drawing lessons from across the business world, to help firms foster an inclusive working environment.
It is part of the BVCA’s mission to help venture capital and private equity firms create an environment in which everyone can thrive.
The new toolkit is designed to help venture capital funds embed inclusive, equitable, and data-driven practices into every part of their operations – which is the foundation for lasting success.
Some of the key features of the toolkit include:
- Clear, practical guidance for embedding inclusion across fund operations and decision-making
- Six key focus areas: strategy and leadership, hiring, people development, policies, transparency, and communications
- Real-world examples and insights from over 100 funds
- Designed for all fund sizes – from small teams to multi-office firms
Download a copy of the new toolkit here. For more information, contact Suzi Gillespie, Head of Research.
Spotlight
Driving investment into spinouts and scaleups
In 2019, just 3% of venture capital for UK university spinouts went to the North of England, a clear indication of the regional funding imbalances that persist in the innovation economy.
However, BVCA members are increasingly directing capital and expertise into high-potential regions, helping to close the historic investment gaps. This month, Liverpool University and Northern Gritstone announced a multi-year partnership ich aims to improve the success of its spinout activities. The partnership includes the option for the University’s most promising spinouts to access Northern Gritstone’s NG Studios venture building accelerator programs in both life sciences and deep tech.
Supporting spinouts and scaleups will be on the agenda of SXSW London. On 2 June, the BVCA’s Director of External Affairs, Karim Palant, will be discussing what it takes to scale a start up in the UK, at Bird & Bird’s Entrepreneurial AM: from seed to scale and beyond.
A limited number of discounted places are available to Venture Capital Update. Use the code BVCAJUNE50 to get 50% off SXSW London passes, including 1-day passes.
On Friday, 4 July, the Reading Tech Cluster Investment Summit 2025 will spotlight high-growth tech scale-ups from the Thames Valley and Berkshire, offering a platform to pitch to investors and celebrate their future potential.
For more information on the BVCA's work across the UK's nations and regions, please contact Baderin Tejuoso, Senior Venture Capital Executive.
Research Update
UK is a leader in Venture Debt
UK leads Europe’s venture debt boom as startups embrace non-dilutive growth capital.
The Global Venture Debt Report 2025, jointly released by Stride Ventures and Kearney, highlights the United Kingdom’s leading role in Europe’s venture debt landscape. In 2024, the UK’s progressive financial reforms, robust late-stage startup activity, and strong institutional participation contributed to its position as the most active venture debt market in Europe, accounting for approximately 18% of all venture debt and growth lending deals.
Europe’s venture debt and growth lending market reached $19.78 billion in 2024, growing at a 21% compound annual growth rate since 2018. Despite a decline in deal volumes due to macroeconomic pressures, the adoption of structured debt continues to deepen across the continent.
A survey of over 200 founders, venture capitalists, and investors revealed that 82% cited growth financing as the primary use case for venture and growth lending. Fintech emerged as the leading sector for venture debt deployment, with projections indicating it will attract 47% of venture debt in FY26, followed by healthtech at 28% and cleantech at 25%.
Media Update
This month, City AM reported that Paris has overtaken London as Europe’s leading tech hub for the first time, reigniting concerns over the competitiveness of the UK’s biggest city for a vital sector.
Meanwhile, the Times reported that Britain’s most active equity investor, BGF, has committed itself to investing more than £3 billion in growth companies over the next five years. The paper also reported that Britain must accelerate its efforts to commercialise scientific know-how locked in universities and stuck in subscale spin-out companies, leaders at the University of Cambridge have warned. The Times also highlighted that Lord Vallance of Balham, the science minister, has issued what the Government says is the first guidance to public agencies to encourage them to commercialise valuable intellectual property.
Finally, FT Advisor reported that a Government white paper claims the best returns in venture capital come from firms with women on the leadership team.
News
City AM:
London loses Europe tech crown to Paris
The Times:
BGF pledges to invest £3bn in growth companies
The Times:
Britain must up its game to commercialise discoveries, says Cambridge
The Times:
For and against: should universities demand equity in spinouts?
FT Advisor:
Venture capital screening for inclusivity gives better results