The first quarter of this year saw UK venture capital investment spike to a four-year high, driven by three megadeals in London.
According to KPMG UK, a total of £7.2 billion was raised in Q1 2026, which makes the UK the number one country for venture capital investment in Europe and places London amongst the top-three global hotspots.
This spike in funding was driven largely by three megadeals made in the UK capital:
- a £1.48-billion deal for AI company Nscale;
- £1.1 billion for autonomous driving firm Wayve;
- and a £744-million deal for energy management business Kraken.
The quarter also saw a £232-million raise for Roark, an aerospace and defence tech firm based in the UK.
According to analysis by KPMG, four out of the top 10 deals made in Europe last quarter came from the UK, and £6.1 million of the total raised from January to march was for businesses based in London.
This is the highest amount of venture capital investment in London since 2020.
Despite London and the UK’s relative success, investors are expected to be keeping a close eye on geopolitical tensions and the Iran conflict, with inflation concerns running high and potentially inhibiting investment.
KPMG said it expects AI to remain the top focus for VC investors, as well as for new aquisitions.
“We had four out of 10 of the largest deals in Europe and 85% of all investment in the UK centering around London, cementing the capital as one of the top three global hotspots for investors now and in the future,” said Head of KPMG UK’s Emerging Giants practice Nicole Lowe.
“It is really encouraging to the see the UK record one of its best ever quarters in terms of VC investment, helping maintain its position as number one in Europe and set strong foundations for the year ahead.”
“Despite ongoing headwinds from geopolitical conflicts and trade concerns, these findings show the UK is being recognised for its attractiveness for investors – something that show no signs of slowing in the coming weeks and months,” Lowe said.
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