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UK Startups and Innovation
13APR

London VC hits £2.14bn, Nscale takes 70%

2 min read
17:59UTC

March 2026 was a headline month for London startup funding. Strip out one mega-round and the picture looks different: 44 deals shared £644m.

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TechnologyDeveloping
Key takeaway

Strip out one deal and London's £2.14bn VC month becomes a £644m one across 44 rounds.

London startups raised £2.14bn across 45 deals in March 2026, up 21% year-on-year⁠1. Six late-stage deals captured £1.88bn, or 87.7% of the month's total. Nscale alone accounted for roughly £1.5bn, approximately 70% of everything raised. Excluding Nscale, the remaining 44 deals raised £644m.

AI companies took 88% of capital across 22 of 45 deals, but two-thirds of that AI allocation was a single cheque. At the early stage, 28 deals raised £106m total, with a median deal size of £1.9m. That is healthy deal volume but modest scale.

The distribution tells the story more clearly than the headline. UK AI funding is bifurcated: a handful of mega-rounds at the top, a large field of small rounds at the bottom, and very little in between. A seed-stage founder raising £2m is operating in a different capital market from a growth-stage company raising £200m. The headline number of £2.14bn creates an impression of abundance that the median founder does not experience.

Deep Analysis

In plain English

London tech companies raised £2.14bn from investors in March 2026, which sounds like a lot. But one company, Nscale, accounted for £1.5bn of that on its own. Remove Nscale from the total, and the remaining 44 companies raised £644m between them. For small, early-stage companies, 28 deals were done at an average of about £3.8m each. That is the part of the market that matters most for founders just starting out, and those numbers look stable rather than exceptional.

What could happen next?
  • Consequence

    Headline UK VC figures in 2026 will be systematically inflated by AI mega-rounds, making it difficult to assess underlying early-stage ecosystem health without normalising for outliers.

Sources:London TechWatch
Mentions:Nscale →DSIT →Atomico →
First Reported In

Update #1 · State capital floods in, seed money drains

London TechWatch· 13 Apr 2026
Read original →
Different Perspectives
Nscale and Open Cosmos
Nscale and Open Cosmos
Nscale chose the New York Stock Exchange for its listing on 18 September, putting Britain's largest AI infrastructure bet to American public investors rather than British ones. Open Cosmos took the opposite route four days earlier, raising nine figures from an all-domestic syndicate on five years of profit, evidence that staying is possible when the balance sheet allows it.
Dame Chi Onwurah and the Science, Innovation and Technology Committee
Dame Chi Onwurah and the Science, Innovation and Technology Committee
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The Entrepreneurs Network
The Entrepreneurs Network
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New Economics Foundation
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Competition and Markets Authority
Competition and Markets Authority
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Highland Europe
Highland Europe
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