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4JUL

London's equity share slips to 57%

2 min read
11:24UTC

London's share of UK equity investment fell from 60% to 57% in 2025 as a handful of large AI and energy deals lifted the North West, Scotland and the South West.

← Back to AI takes record 44% as UK equity shrinksJump to analysis ↓
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Key takeaway

A handful of large deals, not durable growth, drove 2025's regional funding swings.

London's share of UK equity investment fell from 60% in 2024 to 57% in 2025, while the North West grew 82%, Scotland 74% and the South West 104%, the same tracker showed 1. The Bank attributes the shift to a small number of large deals in artificial intelligence and energy, not to broad regional strengthening.

One quarter of deal flow could reverse it. A single fusion or data-centre round lands in a region and its annual share jumps; the next year, with no comparable cheque, it falls back. The North West's 82% rise rides on deal size, not deal count.

Underneath the volatile headline sit slower-moving foundations. The devolution of GBP500m in Local Innovation Partnership Fund grants to seven city-region mayors , and the Biotechnology and Biological Sciences Research Council (BBSRC), a UK public research funder, placing fellows across non-London universities , build regional capacity that will not show up in a single year's equity table.

Deep Analysis

In plain English

For years London has soaked up the largest share of money invested in growing British companies. In 2025 that share fell from 60% to 57%, while the North West, Scotland and the South West of England each saw investment jump by between 74% and 104%. The British Business Bank, which tracks this data, says the shift is mostly down to a handful of very large AI and energy deals happening to land outside London, rather than every region suddenly attracting many more small investments.

Deep Analysis
Root Causes

Institutional venture funds have historically clustered in London because fund managers source and monitor deals through in-person networks, and syndicate partners expect a lead investor within a short commute of their own office. That geographic clustering, not a shortage of regional founders, has kept deal flow concentrated for two decades.

The 2025 shift owes less to any change in that clustering and more to the physical needs of two capital-intensive sectors: AI datacentre buildouts and energy infrastructure both require land, grid capacity and planning consent that London cannot supply at scale, pushing individual mega-deals toward the regions almost by default.

What could happen next?
  • Meaning

    Regional investment growth in 2025 is currently driven by deal size rather than deal count, so it may not signal a broader shift in where funds source deals.

Sources:British Business Bank
Mentions:British Business Bank →London →Scotland →England →Nesta →DSIT →Germany →Berlin →Local Innovation Partnerships Fund →BBSRC →
First Reported In

Update #10 · AI takes record 44% as UK equity shrinks

British Business Bank· 4 Jul 2026
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Causes and effects
Caused by
Mayors get the £500m grant pen
DSIT's GBP500m LIPF devolution to city-region mayors builds regional investment capacity beneath the tracker's headline shifts.
Occurred 1 Jun 2026
Read story →
BBSRC backs 21 Fellows with £10m
BBSRC's GBP10m in non-London research fellows builds regional research capacity underpinning the equity-share shift.
Occurred 18 Jun 2026
Read story →
UKRI confirms 58% cut to STFC labs
Ties to the same tracker's finding that London's equity share slipped to 57%.
Occurred 9 Jul 2026
Read story →
This Event
London's equity share slips to 57%
The regional rebalancing reflects a few megadeals redistributing concentration, not a durable broadening of where UK capital flows.
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