UK VC Investment Hits Five-Year Low Despite AI Interest

Jul 20, 2025
UK venture capital investment has dropped to its lowest level in five years, despite a surge in AI sector interest, according to a KPMG report.

UK venture capital investment has fallen to its lowest level in five years, despite a surge in interest in the artificial intelligence sector, according to a KPMG report. The KPMG Private Enterprise Venture Pulse report revealed that investment levels dropped to £2.6 billion across 435 deals in the second quarter of 2025, down from £3.8 billion in the first quarter.

Despite the overall downturn, AI remained a dominant investment theme, alongside health tech and fintech. Notable deals included £251 million for EV charging firm Believ, £223 million for cloud computing business XY Miners, and £148 million for health tech firm CMR Surgical. These deals positioned the UK among the top ten in Europe for venture capital investments.

Looking forward, KPMG anticipates continued subdued levels of VC investment due to uncertainties like fluctuating tariffs imposed by the US. However, AI is expected to remain a 'hot' sector for growth, with experts highlighting its potential not just in the UK, but across Europe and globally.

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