The UK’s burgeoning artificial intelligence (AI) startup scene is on course to raise a record-breaking $4.4bn (£3.4bn) worth of venture capital in 2024.
According to new data from HSBC Innovation Banking UK and Dealroom, AI startups have already pulled in $2.1bn (£1.6bn) in the first half of the year, a sizeable chunk of the $9.4bn (£7.2bn) raised by all UK startups during this period.
The surge is being driven by so-called megarounds, worth between $100m and $250m, and mega+ rounds, worth over $250m. Nearly half of the capital raised in the second quarter this year were from these blockbuster deals, up from 33 per cent in the first quarter.
“This data shows that positive trends for investment into the UK innovation ecosystem are manifesting and signs of early optimism are coming to fruition ,” said Simon Bumfrey, head of technology and life sciences at HSBC Innovation Banking UK.
“Investors are becoming increasingly active, unlocking value for innovative UK startups particularly in the area of AI,” he added. “We are hoping to see further large investments into UK AI and other areas, both from foreign and domestic investors as the year progresses.”
Autonomous driving AI startup Wayve secured the largest round so far this year with a $1.05bn Series C led by Softbank, Nvidia, and Microsoft. Founded in 2017, Wayve is pioneering ’embodied AI’ to transform cars and robots into self-driving vehicles.
Peter Kyle MP, secretary of state for science, innovation and technology said: “While start-ups like Wayve and Monzo have secured growing levels of investment despite persistent uncertainty and stalling growth, there is work to do to create a better environment for our tech sector.
“Last week, we began that work with changes by the Financial Conduct Authority to make it easier to list in London. This Government is committed to use every available lever to make sure the sector reaches its full potential.
“That means removing unnecessary regulatory barriers and accelerating innovation to share the benefits of technology more widely and restart the engine of our economy,” Kyle added.
Outside of London, Cambridge and Oxford startups are leading in venture capital raised in 2024.
The UK continues to be the premier European hub for startup innovation and investment, outpacing France and Germany combined in the first half of 2024. Globally, the UK ranks third, behind only the US and China.