Key findings:
- £16.9bn has been invested into UK venture-backed companies across 1,417 deals so far in 2026, with capital increasingly concentrated in fewer, larger funding rounds.
- The number of active UK unicorns has risen from 33 to 41 in the past year, with combined valuations reaching £180.9bn.
- Despite continued investment activity, exit markets remain subdued, with only one venture-backed IPO recorded in 2026 year-to-date and fundraising conditions remaining challenging.
The UK venture ecosystem remains globally competitive but a shortage of liquidity and limited exit opportunities risk slowing the recycling of capital needed to support future growth according to new research published by NatWest in partnership with PitchBook.
The report, ‘Reconnecting the Capital Cycle - Liquidity, Exits and the Outlook for UK Venture’, finds that UK venture-backed businesses secured £16.9bn of investment during the first seven months of 2026. While deal values remain comparatively strong, the number of transactions has continued to fall, reflecting a market in which investors are deploying larger amounts of capital into a narrower group of businesses.
Artificial intelligence and deep technology businesses continue to account for a significant share of investment activity, helping sustain overall funding levels despite the more selective environment. The report estimates that AI companies attracted almost £12bn across 616 financings this year*.
At the same time, the UK’s population of venture-backed unicorns continues to expand. There are now 41 active unicorn companies, up from 33 a year ago, with aggregate valuations approaching £181bn.
However, the report argues that the strength of company creation and investment activity is increasingly being constrained by a weaker liquidity environment.
Trade sales remain the dominant exit route for venture investors, while public markets play only a limited role. Just one venture-backed IPO has taken place in 2026 to date, compared with 43 in 2021.
The findings also highlight the venture ecosystem's continued reliance on international capital. Transactions involving both UK and overseas investors account for the majority of invested capital, underlining the important role foreign investors play in supporting later-stage growth companies. UK-investor-only deals represent about one-third of transactions and approximately 10% of value.
The report concludes that while the UK’s venture ecosystem remains internationally competitive, improving the mechanisms through which capital is returned to investors will be essential if the market is to sustain future growth.
NatWest Venture Banking supports high-growth, equity-backed businesses and their investors across the full company lifecycle, from seed stage through to exit. Its specialist team combines sector expertise, flexible growth finance, integrated banking and access to investor networks, with a regional model designed to provide consistent support to founders across the UK.
Greg Brown, Head of Venture Capital, NatWest Venture Banking at NatWest, said:
"The UK’s venture market continues to demonstrate resilience. We’re seeing sustained levels of investment, the emergence of new unicorns and strong investor interest in areas such as AI, deep technology and advanced research.
“The challenge highlighted by this report is not the UK’s ability to create innovative businesses, but its ability to recycle capital efficiently through the ecosystem. Healthy venture markets depend on a balance between investment and liquidity.
“While there are encouraging signs, particularly around efforts to mobilise more long-term domestic capital, there is still work to do to strengthen exit pathways and ensure successful companies generate returns that can be reinvested into the next generation of founders. Improving capital recycling will be critical if the UK is to maintain its position as a leading global venture ecosystem.”
Notes to editors
References
*Vertical data can contain overlapping deals because one company may fall into multiple categories.
Standard PitchBook report methodologies will apply unless otherwise noted.
PitchBook has defined a new class of venture backed startups – venture growth – as VC dynamics have evolved, like companies staying private for longer and sourcing capital from private instead of public markets. They are a subset of late stage start ups that have received financing beyond the typical Series D rounds, they have closed series E or later financing and are further defined by following characteristics: age, number of VC rounds, company status and participating investors.
Cross-border deals are classified as deals with at least one non-domestic investor participating. Non-domestic investors are determined based on the location of the investor’s headquarters. For the purposes of this report, they are defined as firms headquartered outside the UK. Fundraising figures are based on the location of the fund rather than the location of the investor. While the compiled data underlying the featured graphs and report analysis concludes at 10 August,2026, quarter-end figure comparisons will show marginal differences and do not impact the report’s overall conclusions.
About NatWest Venture Banking
NatWest Venture Banking combines specialist expertise in the innovation economy with the depth, scale and connectivity of NatWest Group. Through our extensive regional coverage, we support ambitious founders and investors across the UK, connecting them not only to capital, but also to the relationships, expertise and wider capabilities they need to scale.
About NatWest
NatWest Group serves 20 million customers across retail, commercial and private banking, across the UK. We help people, families, and businesses build financial confidence and thrive - whether that’s opening a first account, buying a home, growing a business, or planning for the future. Alongside a wide range of banking services, we provide specialist sector expertise and entrepreneurial support helping our business customers turn possibilities into progress.
