Venture capital (VC) investment in the UK rose sharply in 2024, with total allocations reaching £9bn – a 12.5% increase year-on-year, according to new data from the British Private Equity and Venture Capital Association (BVCA).
The report highlights a significant uptick in both investment and fundraising activity, with VC-backed firms now supporting over 378,000 jobs across the UK, up 20% from 2023. During the same period, the number of businesses backed by VC also climbed to over 9,000, representing an 11% increase.
The average holding period for exited VC investments extended to 6.7 years in 2024, reflecting the industry’s long-term investment strategy focused on scaling innovation, productivity, and employment.
Sector allocation remained concentrated, with IT and communications accounting for 36% of all VC-backed jobs. Professional, scientific and technical activities represented 13%, while financial and insurance services comprised 10%.
On the fundraising front, UK-managed VC funds raised £4bn in 2024 – up from £2.3bn the previous year – driven by strong performance among several large fund managers. The number of venture funds raising capital also increased from 44 to 48, pointing to sustained LP interest in the asset class.
To maintain the UK’s competitive edge as a VC hub, the BVCA has issued several policy recommendations, including: streamlining and improving uptake of R&D tax credits and advance assurance processes, increasing SEIS, EIS, and VCT thresholds to reflect inflation and better support early-stage businesses, expanding the British Business Bank’s (BBB) Enterprise Capital Fund (ECF) programme to help first-time and smaller fund managers bridge financing gaps, scaling the BBB’s Nations and Regions Investment Funds (NRIF) to bolster regional VC ecosystems and crowd-in private capital and enhancing the Registered Venture Capital Fund (RVECA) regime to reduce costs and ease fund formation, including standardized legal documentation for new VC funds.
