KPMG indicated that London’s booming tech scene has propelled UK venture capital investment to its strongest quarter in four years, according to KPMG’s latest Venture Pulse report. In the first three months of 2026, British startups raised £7.2 billion, the highest total since the second quarter of 2022. This performance not only secured the UK’s position as Europe’s top destination for venture funding but also placed London among the world’s three most attractive cities for investors.
According to the insights from KPMG, the surge was driven largely by a handful of massive deals concentrated in the capital.
Three standout London-based transactions accounted for a significant portion of the total: AI infrastructure provider Nscale secured £1.48 billion, autonomous vehicle developer Wayve raised £1.1 billion, and energy optimization company Kraken attracted £744 million.
A further £232 million deal for aerospace and defense technology firm Roark rounded out the UK’s strong showing, with four of Europe’s ten largest venture investments originating from Britain during the period.
Geographically, the dominance of London was striking. Businesses based in the capital captured £6.1 billion—or 85 percent—of the UK’s overall funding haul, the highest share recorded since 2020.
This concentration highlights the city’s growing status as a global magnet for high-growth companies in cutting-edge fields.
Nicole Lowe, Head of Emerging Giants and KPMG Access in the UK, noted that the quarter’s performance demonstrates the UK’s enduring appeal to international backers despite broader economic uncertainties.
She highlighted the nation’s continued strength in artificial intelligence, clean energy, and emerging dual-use technologies, as well as self-driving vehicles—sectors poised for substantial expansion.
Lowe described the figures as “one of the UK’s best-ever quarters,” providing a solid platform for sustained growth throughout the rest of the year.
Anna Purchas, London Office Senior Partner at KPMG UK, echoed this optimism, pointing to London’s ability to attract large-scale capital for transformative ideas in AI, energy, and defense.
“The concentration of these landmark deals shows real momentum,” she said, urging continued investment in skills and infrastructure to help these companies scale successfully.
On the global stage, the picture was equally buoyant. Worldwide venture capital investment more than doubled from £98 billion in the final quarter of 2025 to a record £246 billion in Q1 2026, spread across 8,464 deals.
Conor Moore, Global Head of KPMG Private Enterprise, attributed much of this boom to an unprecedented wave of megadeals, particularly in the United States, while noting healthy activity across Europe and Asia.
Artificial intelligence remained the dominant theme, shifting from foundational large language models toward practical applications across industries.
KPMG cautioned that geopolitical tensions, rising oil prices, and potential inflation could create headwinds. Nevertheless, AI is expected to stay front and centre, with increased merger and acquisition activity anticipated.
Sectors such as defense technology, space tech, and cybersecurity are also projected to draw growing investor interest amid a more uncertain global environment.
For the UK, the main takeaway is quite clear. London’s megadeal momentum has not only delivered an impressive start to 2026 but has also reinforced the country’s reputation as a premier hub for innovation and capital. KPMG concluded its in analysis that if this trajectory continues, British entrepreneurs could be well positioned to capitalize on the potential opportunities ahead.