Health startups spur UK VC investment to top $4BN in Q1

UK health and life sciences startups raised $1.8bn in VC investment in Q1 2025, more than double the amount of the second-placed sector, as UK VC investment grew on the year, new data shows.

HSBC Innovation Banking and Dealroom data shows that VC investment in health and life sciences was powered by two mega-rounds: Isomorphic Labs’ $600m raise and Verdiva Bio’s $411m round.

Nearly half of all VC investment in health and life sciences went to AI-powered startups, underscoring the technology’s growing influence on healthcare innovation, the data shows.

Behind health and life sciences came enterprise software ($724.2m), fintech ($724.1m), energy ($372.5m), and media ($240.5m).

Overall, UK startups raised $4.2bn in the quarter, the data shows, an eight per cent year-on-year increase and its highest Q1 funding since 2022.

The data also show that most UK venture capital in Q1 was raised at Series B and Series C stages, raising over $1.8bn, followed by $1.7bn at the late stage.

Country-wise, the data show that in Q1 2025, UK startups raised a similar level of funding to startups in Germany ($1.8bn) France ($1.4bn), and Spain ($1bn) combined.

Simon Bumfrey, CEO of HSBC Innovation Banking UK, said: “The UK remains Europe’s innovation powerhouse – driving revenue, producing more unicorns, and capturing a growing share of VC investment.

“With rising early-stage investment, fast-growing sectors, and standout IPO candidates, we’re excited to see what the rest of the year holds for the UK innovation economy and remain focused on supporting firms to accelerate growth across the ecosystem.”