As VC Investment Rises Is The U.K. A Good Place To Scale?

Forbes

30-05-2025

Quantexa founder Vishal Marria says British money is hard to raise beyond B and C rounds
As far as raising VC capital is concerned, the U.K. prides itself on being a good place to start a business. However, questions remain over the ecosystem's ability to support companies as they scale.
According to figures published this month by the British Venture Capital Association, investment across 2024 totalled £9 billion, representing a rise of 12.5% from the previous year. And with the same report noting an increase in the number of venture funds raising capital to support their investment strategies, it seems likely the upward trend in investment will continue.
That's fine as far as it goes, but successive surveys have pointed to a shortage of capital from local funds once larger sums of money are required - usually beyond the B and C stages. This is the point when international investors with deep pockets tend to step in.
As the BVCA pointed out in a separate report, increasing investment by overseas funds has been a factor in British startups moving their headquarters to other jurisdictions - notably the U.S. - as they begin to scale. This is a matter of some concern to policymakers who want to keep cutting-edge technology firms headquartered in the U.K.. More fundamentally, while there is plenty of capital available to support megarounds and unicorns, many scaling businesses struggle to find the necessary capital.
So, what are the realities of raising growth finance in the U.K.? Earlier this week, I spoke to Vishal Marria, founder and CEO of Quantexa, a company that provides AI-driven decision-making technology to a range of public and private sector clients. In March, Quantexa completed a Series F round, securing $175 million in a deal led by Teachers' Venture Growth, a division of the Ontario Teachers' Pension Plan (OTTP) investment fund. The investment values the company at $2.6 billion.
First the good news. As Quantexa has demonstrated, there is money available. 'If you are a great company you can attract capital and investment,' says Marria.
However, as he acknowledges, scaling a U.K. technology company will almost certainly require overseas finance. 'Getting British money is very difficult after stages B and C,' he says. 'If you look at my cap table, Series D was led by Warburg Pincus, a US private equity company, Series E was led by GIC of Singapore and Series F was led by OTTP.'
Quantexa's SaaS platform uses a combination of big data, analytics and AI to enable customers to make better decisions. That could mean helping a bank to detect money laundering or working with government departments to uncover fraud using a mixture of internal and external contextual data. For instance, the company has worked with the U.K. government's Cabinet Office to pursue criminals who took advantage of a 'bounceback' loan scheme introduced to support businesses during the COVID pandemic. With revenues of $100 billion, Quantexa has established itself as a global player in this field, with customers in Europe, the APAC region and North America.
This, combined with rapid growth, has enabled Quantexa to attract investors, but Marria acknowledges, a relative shortfall in domestically originated funding does have potential consequences. 'There is a playbook that says, Dear Founder, you have to move to the US to complete your journey and IPO,' he says.
So there is, he says, work to be done to improve the flow of domestic funding. The great hope in this regard is that planned reforms that will allow pension funds to invest in startups and scaleups. 'It is really important to unlock pension fund money and we need to do more of that,' says Marria.
And there has been some progress on that front. This week, the government published plans to create £25bn pension scheme megafunds, which will be required to invest more in the domestic economy, with scaleups and infrastructure projects among the beneficiaries. Announcing the reforms Finance Minister Rachel reeves promised 'Billions more invested in clean energy and high-growth businesses.'
Beyond questions of finance, Marria stresses that being headquartered in the U.K. has a number of benefits, not least in terms of geography and time zones. 'We are in the centre of Asia and the US. I can start my day with a 6.30 call in Asia, followed by UK client calls and finish the day with calls to the U.S.," he says.
For companies working in the AI and data space, the U.K. potentially has some other important advantages. Later this year, the UK government will be publishing its industrial strategy, which is expected to focus on key technology sectors, such as AI, quantum and bioscience. With a huge amount of data at its disposal and a clear requirement to deliver better services without necessarily raising overall spending and taxation levels, the government itself is likely to be an important customer for AI and advanced data services. Clearly, there will be opportunities for startups. However, Marria stresses that not everyone will benefit.
'The government has a substantial view of data, and has a number of use cases for putting that data to work. You have innovative companies who can help solve the problems,' he says. 'However, because of the sensitivities of the data, the public sector has onboarding and security controls and it cannot work with all of the companies.'
In Marria's view, the U.K. is a good place to scale a business, with funding available for companies that can demonstrate growth and revenue potential. Nevertheless, more domestic funding is required.
I