London based AI start-ups raised a record $3.5 billion (£2.9 billion) in venture capital investment last year keeping the capital at the top of the European league table.
latest figures from analysts Dealroom and the Mayor’s growth agency London & Partners shows AI investment shot up more than 50% from the $2.3 billion of 2023 and is 21% higher than the previous record of $2.9 billion set in 2022.
The data also shows that London leads in Europe for AI VC investment, followed by Paris ($2.4 billion) and Munich ($763 million). The capital ranks third globally following only New York ($6.1B) and the Bay Area ($60.7 billion) around California’s Silicon Valley.
Sectors seeing particularly strong growth included health with 33 companies raising $556 million.
The figures come the day after Keir Starmer launched an action plan to make the UK a world leader in AI.
AI start-ups accounted for more than a third of the $10.8 billion of funding raised across the tech sector as a whole. London has produced 120 unicorns to date, with eight companies becoming unicorns in 2024, including EyeBio, IntraBio, Flo Health, Minute Media, and Preqin, as well as AI companies Wayve, Lighthouse, and ElevenLabs.
Overall, 20 megarounds of $100 million plus were raised by London startups last year. These include rounds for: Wayve, Monzo Bank, Highview Power, Lighthouse, WorldRemit, Deep Green, Flo Health, Nscale, Flagstone, Char.gy, Myricx Bio, Skyports, Purespring Therapeutics, Abound, MAR mining, Amber Therapeutics, Vicebio, Kaluza, and Tessl.
Separate figures from HSBC’s innovation Bank showed how London dominates the UK sector with companies in the capital accounting for $10.7 billion, or two thirds of the $16.2 billion total raised in the UK last year. Cambridge came second with just $1.2 billion raised, followed by Oxford on $675 million.
London & Partners CEO Laura Citron said: “In 2024, London proved its status as a global hub for AI, with record investment flowing into our companies. The numbers say it all – this milestone reinforces our leadership in driving AI innovation worldwide. Frontier innovation, including AI and life sciences, will be at the heart of London’s 10-year Growth Plan, to be published next month.”
Catherine Lenson, COO at investors Phoenix Court, said: “It is no surprise to see such growing momentum in London. With its combination of world-class talent, access to capital, and a supportive regulatory environment, a new generation of technology companies with the potential to become national, regional, and global champions are being born.
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“From our own neighbourhood of Somers Town, nestled between Kings Cross, St Pancras and Euston stations, we are investing in companies solving real world problems who are also making sure the benefits of their innovation are being truly distributed.”
Mati Staniszewski, co-founder of AI voice generator ElevenLabs, which opened a European headquarters on Wardour Street last year, said: “The ElevenLabs team was initially attracted by London’s leading universities, as well as the city’s strengths in AI research and safety. London provides access to a deep pool of talent across AI, tech as well as media and entertainment, which is central to our customer base. London’s status as a creative hub has also enabled us to build valuable partnerships while growing our business.”