UK Funding Crisis: Founders Express Growing Frustration

UK Startup Funding Lags Behind Silicon Valley

Data from Dealroom, as reported by the Financial Times, indicates that UK-based startups secured £16.2 billion in funding last year. This figure represents a significant disparity when compared to the £65 billion+ raised by startups in Silicon Valley over the same timeframe.

The United States is demonstrably increasing its lead in venture capital dominance. In 2024, a majority – 57% – of all global venture capital funding was directed towards U.S. startups.

This marks the first time this percentage has surpassed 50% in more than ten years, according to Dealroom’s analysis.

Growing Concerns Among UK Founders

This expanding funding gap has been observed by UK founders for several years, as the Financial Times highlights. Consequently, a growing number are contemplating relocation to other countries.

Mati Staniszewski, co-founder of London-based AI company ElevenLabs, explained their strategic decision to incorporate in Delaware. He stated that this structure is favored and well-understood by American investors.

“Recognizing the primary source of venture funding is the U.S., we established ourselves as a Delaware corporation,” Staniszewski told the FT.

Potential Exodus and Calls for Action

Barney Hussey-Yeo, founder and CEO of the AI startup Cleo, currently divides his time between the UK and San Francisco, spending four months annually in the latter. He is actively evaluating a permanent relocation.

“As companies grow, access to capital within the U.K. diminishes,” Hussey-Yeo noted. “The situation is deteriorating, and without intervention, the U.K.’s position is precarious.”

He expressed strong concern, stating that the U.K. faces significant challenges if this issue isn't addressed.

Venture capital availability is becoming a critical factor for UK startup growth.