More UK companies secured their first equity investment in 2025 than at any point in the previous four years, while the share of deals completed outside London increased and artificial intelligence absorbed a rapidly growing proportion of available capital.
Research from Beauhurst and Penningtons Manches Cooper found that 2,730 companies raised external equity for the first time during 2025, a 29.9% increase from the previous year.
Those businesses raised a combined £4.4bn, up 11.7%, meaning the number of newly funded companies grew substantially faster than the total amount invested.
The difference was reflected in deal sizes. The average first-time round fell from £1.97m in 2024 to £1.67m in 2025, while the median dropped to £200,000.
The pattern continued into the first six months of 2026. Beauhurst recorded 1,221 companies raising their first equity round, securing £2.11bn between them. The average deal value was £1.79m and the median declined further to £170,000.
Henry Whorwood, managing director at Beauhurst Insights, said: “The data shows a first-time investment market that is both expanding and changing shape.”
Geography is one of the clearest changes. For the first time since 2022, companies outside London accounted for a majority of first-time fundraisings during 2025. London’s share fell further in the first half of 2026, to 44.6% of first-time deals.
London continues to dominate UK private investment more broadly, with its dense concentration of venture funds, technology companies, professional advisers, and larger funding rounds. First-time investment provides a different measure: where companies are succeeding in bringing institutional or angel equity into their ownership structures for the first time.
A wider geographical distribution can indicate that more regional companies are reaching the point at which external equity becomes available to them. Beauhurst highlighted growing activity in areas including the West Midlands and Scotland.
The second major shift is the scale of investor interest in artificial intelligence. AI businesses completed 660 first-time fundraisings in 2025 and attracted £1.45bn, equivalent to 32.9% of the value of all first-time equity raised during the year.
That was already almost double the sector’s 17% share in 2024. During the first half of 2026, AI’s share of first-time investment value increased again to 58.6%.
The figures show broader access to initial funding developing alongside stronger concentration by sector. More companies are securing a first cheque, and more of those deals are taking place beyond London, while AI accounts for a disproportionately large share of the money invested.
Deal count and investment value therefore tell different parts of the story. The number of transactions shows how widely capital is reaching companies, while total value can be heavily influenced by larger rounds in sectors attracting intense investor attention.
Falling median rounds also change the practical meaning of an investment recovery for founders. A greater number of businesses gaining access to equity can support product development, hiring, and early commercial expansion, but smaller first rounds may leave capital-intensive companies needing to return to investors sooner.
The regional swing raises a similar question around follow-on capital. Completing a first round outside London is one measure of access; securing later growth funding is another. Regional ecosystems need enough investors, advisers, customers, skills, and subsequent capital to prevent companies relocating or stalling as their financing requirements increase.
AI’s growing share of investment raises the hurdle for businesses elsewhere in the market. Investors allocating more capital towards model development, AI infrastructure, applications, and related technologies still operate finite portfolios, leaving other sectors competing for attention in a market increasingly shaped by one dominant theme.
The report covers first-time equity rather than every form of business finance, so it excludes companies growing through debt, retained earnings, grants, or other routes. A first equity round also provides no guarantee of subsequent growth.
It does, however, provide an early indicator of which businesses, technologies, and regions are entering the funded growth pipeline. On that basis, the UK market became broader by company count and geography through 2025 and early 2026 while becoming markedly more concentrated around AI by capital value.
You must be logged in to post a comment.