Venture capital (VC) investment into London’s start-up and scaling businesses surged in the third quarter of 2025, according to the latest KPMG Private Enterprise Venture Pulse report.
London’s small businesses raised £1.9 billion in the third quarter of 2025, up from £1.6 billion in Q2.
A total of 199 investments were completed in the capital, up 26% from 157 deals in Q2, highlighting renewed investor appetite in supporting the region’s small business community.
The largest raise in Q3 was a £150 million investment in consumer electronics firm Nothing and the software sector led overall, with more than half (58%) of London VC investments in Q3 made into the sector.
This increase in VC investment comes as KPMG’s recent mid-year Private Enterprise Barometer found that the appetite for London-based businesses pursuing equity finance is gaining momentum, with more than a quarter (26%) of the City’s businesses now open to VC investment.
Anna Purchas, London Office Senior Partner at KPMG UK, said: “The rise in VC investment we’ve seen highlights the continued strength and depth of London’ innovation economy. Investors are clearly backing the city’s most ambitious founders and high-growth businesses, from those driving productivity and business efficiency to innovators in financial technology.
“London remains the beating heart of the UK’s small business ecosystem, home to an extraordinary community of entrepreneurs, investors and advisers who together create the conditions for ideas to scale and succeed. It’s this connected ecosystem that continues to underpin the city’s resilience and long-term growth, and why Frontier Innovation is rightly called out as a key sector for growth in the London Growth Plan.”
Nationally, KPMG revealed that the UK had bounced back in Q3 of this year following a Q2 which saw it record its slowest quarter of VC investment in five years.
New figures showed that investment levels jumped to £4.6 billion across 594 deals, up from £2.6 billion across 435 deals last quarter, thus making the UK number one in Europe when it came to VC investment in Q3.
The quarter was defined by a mega deal in the AI sector with NScale securing a £1.1 billion investment with other major deals including Rapyd Financial, which offers payments, mobile wallets, money transfers, card issuing, and fraud protection, netting £370 million and crypto and cloud infrastructure firm PS Miner landing £259 million.
Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, said: “It is extremely encouraging and constructive to see the UK rebound strongly in Q3 with high levels of VC investment but what is most positive is the fact that the country is being recognised for its attractiveness when it comes to future investors. Something which continues to show a level of confidence in the country in this quarter and for many more to come.
“The deals during Q3 also continue to showcase the UK’s growing role in being a hub for frontier tech across a range of areas including AI and crypto.
“This is a massive shot in the arm of firms looking for investment across the UK and provides a very strong platform for future growth and renewed interest despite headwinds from geopolitical conflicts and trade concerns.”
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