State of UK Deep Tech report 2025

In a pivotal year for deep tech, the report highlights a world-class deep tech sector, powered by research excellence, strong early-stage funding and global investor interest. Yet translating this momentum into long-term competitive advantage will require a step change: greater access to late-stage capital, clearer commercial pathways, and continued investment in regional innovation clusters.

The report reveals a tale of two realities - one of exceptional potential, and another of structural hurdles that must be addressed to fully unlock it.

What is deep tech?

Deep tech refers to technologies that build on the fundamental principles of engineering and science to create novel solutions and are recognised as being capital, time, and R&D intensive. Being grounded in cutting-edge advances in engineering and science, deep tech innovation offers solutions to the world’s most complex environmental, economic and societal challenges.

Why does it matter?

Deep tech plays a critical role in shaping the future of societies, economies and industries.  Its importance stems from the transformative impact of engineering and science-led innovation.

• Strengthens global competitiveness and resilience in critical technologies.
• Drives scientific and technological progress enabling breakthroughs that transform industries.
• Boosts UK economic growth, attracting international investment and supporting high-value sectors.
• Drives regional prosperity: anchoring innovation clusters across the UK.
• Creates new markets and high-value jobs, fuelling long-term innovation-led growth.
• Provides solutions to some of the world’s most complex challenges, from climate change, health, energy security, to next-generation communications.

Deep tech sectors

While not an exhaustive list, here are some examples of technology areas under deep tech: 

Key insights

UK deep tech investment is resilient and third globally

• The UK is the world’s third largest deep tech hub, raising $43.7 billion since 2019.
• 2025 is on track for a record year, with deep tech accounting for 31% of all UK venture capital funding.

Highly valuable UK deep tech ecosystem

• UK deep tech startups now hold $155 billion in combined value (up 4.8 x since 2019).
•  Over 50 companies have reached $1 billion + in valuation or $100 million in revenue.

An active, multi-directional exit market

• 2025 is the second most active year on record, $20 billion in M&A and five $1 billion + exits.
• Most buyers are international, especially the US, though there is significant activity of the UK buying international startups.

Challenges in the deep tech ecosystem

Late-stage capital remains a critical bottleneck.

• UK investor participation falls from 57% at seed to under 10% late stage.
• The UK has a calculated $4-£11 billion annual late-stage funding gap required to build global leaders.

Funding is diverse - but uneven.

• Venture capital and corporate investment dominate, and grants remain crucial for early R&D.
•  UK debt financing and long-term patient capital are underdeveloped compared to peer markets.

Stronger scaling than Europe - but the UK still lags behind the US

• UK deep tech companies convert through funding stages more reliably than European peers.
• US startups however raise 50-100% larger rounds, giving them more firepower to win global markets over UK peers.