Venture capital investment in London increases by almost two thirds to close 2024, KPMG
Venture capital investment in London’s start-ups rose by nearly two thirds (61%) in Q4 to £2.9 billion, up from the £1.8 billion raised in Q3 of last year, according to KPMG’s latest Venture Pulse report.
The 299 transactions were largely driven by a billion-pound funding round for the sustainable data centre platform GreenScale. Other notable deals included a £303 million raise for cloud-based hotel management platform Lighthouse Intelligence and a £214 million funding round for online money transfer platform Zepz.
London has seen significant investment in its IT and software sector, with 124 businesses – focusing on areas such as AI, machine learning and augmented reality – raising a total of £1.1 billion. This follows KPMG’s KPE Barometer, which revealed that firms in London are the second most likely in the UK to plan future investments in AI. These developments align with the government’s recent unveiling of its AI Opportunities Action Plan, a roadmap designed to boost the country’s AI sector.
The healthcare and life sciences sector in London has also attracted considerable investment, with 38 businesses raising £234 million between them. This comes ahead of the London Growth Plan in March. The plan aims to revitalise London’s economy, with a focus on supporting its highly skilled sectors such as life sciences.
Anna Purchas, London Office Senior Partner at KPMG UK, said: “London continues to cement its position as a global hub for venture capital investment, with Q4’s strong performance reflecting the capital’s ability to attract substantial funding despite ongoing economic challenges.
“The standout funding rounds from innovative firms like GreenScale, Lighthouse Intelligence and Zepz demonstrate the strength of London’s tech sector.
“The combination of investor confidence and a vibrant entrepreneurial scene makes London well positioned to support the UK’s drive towards much-needed growth in 2025.”
The national outlook
The UK attracted the highest level of VC investment in Europe in 2024, following a strong end to the year.
The UK raised a total of £15.5 billion VC investment after funding in Q4 jumped by more than a third from £3.1 billion to £4.4 billion. This was driven largely by $1.3 billion raised by Greenscale, a London-based AI data centre firm. A total of 569 businesses made up the £4.4 billion investment, including £409 million raised by Insider and £303 million raised by Lighthouse.
These results come just weeks after KPMG published its first ever KPE Barometer, which revealed that over 90% of Britain’s private business owners are confident of growth in 2025.
Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, said: “After a difficult Q3, it’s great to see the UK end the year as the top destination in Europe for VC investment.
“The strong rebound in Q4 has boosted optimism among investors looking ahead to the rest of 2025, with AI likely to remain at the forefront of those looking to invest.
“However, the impact of both global and domestic events such as the UK Budget measures and the new US President taking office could still contribute to a level of investor caution.”
