Health tech was the UK’s strongest sector for investment in the first quarter of 2025, with startups in the field pulling in $1.8bn, according to new research.
Health tech and life sciences startups saw their second strongest quarter for VC investment on record in the first three months of the tear, analysis from HSBC Innovation Banking and Dealroom has found.
This puts health far above other prominent sectors for VC investment, such as enterprise software and fintech, which both raised a little over $724m.
Recent megarounds in the health sector drove its strong performance, such as Isomorphic Labs – an AI drug discovery startup from DeepMind co-founder Sir Demis Hassabis – which raised $600m in March and Verdiva Bio – a life sciences group developing a weight loss drug to rival Ozempic – which raised $410m in January.
Though health ostensibly dominated in the first quarter of the year, almost half of all VC investment in health tracked in the research went to startups using AI to power their innovations, suggesting a strong influence of artificial intelligence underscoring other sectors.
“It’s exciting to see UK health tech firms thriving and attracting near-record investment, driven by AI innovations transforming the sector and unlocking exciting new possibilities,” said HSBC Innovation Banking UK CEO Simon Bumfrey.
“This is a testament to the resilience of the innovation ecosystem, which has weathered an uncertain operating environment to continue attracting investment. The UK remains Europe’s innovation powerhouse… we’re excited to see what the rest of the year holds for the UK innovation economy and remain focused on supporting firms to accelerate growth across the ecosystem.”
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