How UK Tech Valuation Surged to US$1.2tn in 2024

January 16, 2025

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HSBC's valuation of the UK innovation economy is 20% higher than its 2023 valuation

According to analysis by HSBC Innovation Banking, the UK's tech growth has been marked by record growth, new unicorn start-ups and AI/fintech investment

The innovation ecosystem of the United Kingdom has seen a remarkable uptick in valuation, now standing at a collective US$1.2tn, highlighting a robust 20% increase from just a year prior.

These figures are product of an analysis conducted by HSBC Innovation Banking UK alongside Dealroom. This valuation signifies a striking ninefold amplification over the preceding decade, affirming the UK's standing as a principal hub for technological and innovative advancement globally.

Start-Up Expansion and Employment Boost

Central to this swelling in valuation is the dramatic growth observed among UK-based start-ups.

These enterprises are now responsible for employing more than 1.8 million individuals globally—a figure that doubles the employment statistics reported back in 2020.

This surge not only emphasises the tech sector’s increasing economic contribution both domestically and internationally but is also a pivotal element of the UK's economic landscape.

Significant portions of this valuation derive from pre-exit firms, showcasing a realm ripe with possibilities for potential acquisitions or public offerings in the near future.

Simon Bumfrey, Interim CEO of HSBC Innovation Bank UK | Credit: Simon Bumfrey

"The UK innovation economy remained resilient in 2024, achieving record enterprise value and driving significant job creation across the ecosystem," states Simon Bumfrey, CEO of HSBC Innovation Banking UK.

He remarks on the dynamic involvement of firms, especially noting that nearly half of this enormous enterprise value is attributed to companies established within the past 15 years, spotlighting the dynamic role of newer firms in the UK’s innovation sector.

Europe’s Innovation Leader

Ranking as the largest innovation economy in Europe and third globally, trailing only the United States and China, the UK’s US$1.2tn valuation surpasses the combined values of the French and German ecosystems.

This attests to the UK’s dominance within Europe’s tech sector. Furthermore, in 2024 alone, UK start-ups raised a formidable US$16.2bn, nearly doubling the capital raised by their counterparts in Germany and France.

This advancement is especially pronounced at breakout funding stages, with series B and C rounds alone attracting upwards of US$6.5bn. The later funding stages also witnessed considerable activity, evidenced by the birth of nine new unicorns, escalating the total to 181 start-ups valued at over US$1bn.

Simon attributes this success to a supportive ecosystem and burgeoning confidence from investors. "With half of the UK’s enterprise value concentrated in pre-exit companies and dry powder levels reaching near-record highs, the commitment and confidence from domestic and international investors towards UK innovation businesses is strong,” he elaborates.

One-third of billion-dollar start-ups from Europe call the UK home

Fintech and AI: Frontiers of Innovation

In 2024, AI emerged as a standout sector with UK-based AI start-ups drawing in US$4.2bn in venture capital, marking a notable 31% increase from the previous year. This accounted for 27% of all venture capital raised nationally, the highest share on record.

Significant investment rounds, such as a US$1.1bn influx to autonomous driving enterprise Wayve—a leader among five AI start-ups in achieving mega-round fundings surpassing US$100m—underscores the sector's potential. "AI continues to thrive, setting the stage for a wave of disruptive commercial solutions across the vast majority of sectors," reflects Simon.

Monzo is one of the UK's fastest growing fintech innovators | Credit: Monzo

Reclaiming its title, fintech stood as the most funded sector, drawing US$3.9bn in venture capital. High-profile investment rounds include substantial funds raised by entities such as challenger bank Monzo and digital remittance frontrunner WorldRemit, highlighting ongoing demands for innovative financial solutions and cementing the UK’s leading role in this sphere.

Comprehensive Growth in Venture Capital

The year also saw UK venture capital entities accumulating US$11.3bn in dry powder, a 59% upturn from 2023, indicating a strong investment pathway moving forward.

International engagement has expanded, with 68% of the funding rounds including international participants, particularly noticeable in late-stage funding, showcasing UK innovation’s global allure.

Noteworthy too is the significant growth in other sectors such as health tech and enterprise software, each securing US$3.3bn in venture capital, with enterprise software achieving a strong performance in the year’s final quarter. “As we look to 2025, we remain committed to partnering with firms across the ecosystem to support and accelerate growth,” comments Simon.

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