The future of venture capital investment in the United Kingdom has been boosted after a KPMG report revealed a rise in interest from US based investors due to the market’s ‘attractiveness’. Research undertaken as part of the KPMG Private Enterprise Venture Pulse has now outlined that the longer-term outlook for UK VC investment was ‘encouraging’ and ‘constructive.’
This is said to be especially among US based backers, due to many of them seeing UK startups as a cost-efficient entry point into “globally scalable companies, making the UK a strategic hub for cross-border investment.”
This shot in the arm for the investment community comes as the report also 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 released indicate that investment levels surged 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 ‘attractiveness’ for US based investors and the latest positive figures has been attributed to the UK being highlighted for its role in frontier tech with deals in AI, fintech, crypto and computing underscoring “strength for investors when it comes to next gen tech.”
The quarter was defined by a mega deal in the AI sector with NScale securing a £1.1 billion investment with other 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 that it is encouraging and constructive to see the UK rebound 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.”
This means, across the first quarters of the year, the UK has “seen £11 billion invested across 1,536 deals so far.”
Looking ahead, trends expected for Q4 include VC investment in cleantech, AI and defence tech-based companies.
Elsewhere, international venture capital investment rose from £84 billion in Q2 of 2025 to £90 billion in Q3 across 7,579 deals.
The Americas have reportedly led with £63 billion across 3,474, while Asia saw muted investment at £12.6 billion across 2,310. AI continued to dominate VC activity, with key funding rounds for AI model development and applications.
The United States has accounted for the majority of the VC investment in the Americas, while Europe saw steady growth with £13 billion across 1,625 deals. Looking ahead to Q4, global VC investment is set to remain fairly stable, with AI “continuing to dominate.”
Robotics and defence tech will also continue to be “focus areas.”