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24AUG

London's equity share slips to 57%

2 min read
16:40UTC

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.

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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 →Small Business Equity Tracker →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
Read original →
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.
Different Perspectives
Highland Europe
Highland Europe
Highland Europe, the growth-equity firm behind a €1bn-plus fund, took €65m from the British Business Bank into its Technology Growth Fund VI on 30 July via British Patient Capital. For a Geneva-based growth investor, the Bank's cheque is routine cornerstone capital, unrelated to which Whitehall department currently claims to sponsor UKRI.
Integrity Growth Partners
Integrity Growth Partners
The Los Angeles firm put £16.1m into Prevalent AI on 24 August, the London GCHQ-alumni company's first outside capital, specifically to fund its US expansion. Its stake is a single commercial bet on one UK deep-tech founder's American growth, not a comment on which department UKRI answers to this month.
Temasek
Temasek
Temasek led PhysicsX's Series C on 30 July, into which the British Business Bank put $25m through British Growth Partnership Fund I. State-backed pension capital rides behind a foreign-led growth round while UK weekly tech funding fell 72% to £102.95m across nine rounds three weeks later.
Innovate UK's Women in Innovation cohort
Innovate UK's Women in Innovation cohort
Sixty-one founders won £75,000 grants from Innovate UK on 5 August, the programme's largest-ever cohort, with a further 39 highly commended founders taking support without cash. For these founders the sponsorship dispute over UKRI's parent department is academic: the money and mentoring arrived exactly as scheduled.
Financial Conduct Authority
Financial Conduct Authority
The FCA added five fintechs, ClearScore, Modulr, Teya, Urban Jungle and Zilch, to its Scale-up Unit on 7 August, the first cohort it regulates solely rather than jointly with the Prudential Regulation Authority. The unit's expansion is a routine regulatory build-out running on its own timetable, unconnected to the sponsorship dispute over its sister department UKRI.
Cabinet Office
Cabinet Office
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