British Start-Ups Struggle to Keep Up with Silicon Valley in Venture Capital Funding
Recent data from Dealroom, as cited by the Financial Times, reveals a significant disparity in venture capital funding between British start-ups and their Silicon Valley counterparts. In 2024, British start-ups raised a mere Ā£16.2 billion, a stark contrast to the more than Ā£65 billion raised by Silicon Valley companies during the same period. This widening gap has been a consistent trend over the years, with the U.S. steadily pulling ahead.
According to Dealroom, in 2024, 57% of global venture capital funding went to U.S. start-ups, marking the first time in over a decade that the U.S. has surpassed the 50% mark. This disparity has not gone unnoticed by U.K. founders, prompting many to consider relocating abroad in search of better funding opportunities.
Mati Staniszewski, co-founder of London-based AI company ElevenLabs, highlighted the importance of setting up as a Delaware corporation to attract American investors, given that most venture funding originates from the U.S. Meanwhile, Barney Hussey-Yeo, founder and CEO of AI start-up Cleo, expressed his concerns about the lack of capital in the U.K., stating that he already spends a significant amount of time in San Francisco and is contemplating a permanent move.
The growing disparity in venture capital funding between the U.K. and the U.S. is a cause for concern among British start-ups, with many feeling the pressure to relocate to Silicon Valley in order to access the necessary resources for growth and expansion. Without addressing this issue, the U.K. risks falling further behind in the global start-up landscape.
