“The venture capital market in the United Kingdom (UK) settled into a more selective, disciplined rhythm in 2025 as investors navigated a year shaped by inflationary pressure, shifting interest rates and global trade tensions that tested confidence across the wider economy. Deal value remained steady, although capital flowed more cautiously with investors favouring stronger fundamentals and clearer routes to profit. Early‑stage rounds remained active, while late‑stage financings were fewer and more scrutinised. Across Europe and the UK, valuations stabilised at more sustainable levels and sectors driving investment continued to be AI, life sciences and climate tech.¹ Interestingly, the Private Equity market showed that 2025 was the lowest year for fundraising in 10 years.²

• Valuations stabilise: UK valuations have stabilised after the volatility of previous years.³
• Early-stage deals surge: The majority of Mishcon’s 2025 deals were in Seed and Series A rounds, reflecting a renewed focus on early-stage innovation.
• Pre-seed, Seed and Series A activity gained momentum and accounted for an increasing share of deal flow, with Crunchbase signalling that early‑stage deals rose to 37–40% of global venture activity, up from around 30–32% in 2024. PitchBook and Beauhurst report the same trend in the UK, with early‑stage rounds increasing their proportional share as later‑stage financings slowed.⁴
• Investors turn cautious: There is a clear shift from aggressive deployment to strategic investment. Investors are prioritising businesses with strong fundamentals and clear paths to profitability. Sifted gave a full analysis of UK investor behaviour earlier this year.⁵
• Late-stage investment drops: Fewer late-stage rounds were completed in Q1, mirroring global trends as investors become more risk-averse at higher valuations.⁶

Sources

¹ Europe's VC Funding Stayed Flat In Q1, Even As Healthcare Added A Third and Q1 2025 European VC Valuations Report – PitchBook
²3 charts setting the stage for Europe's PE fundraising in 2026 - PitchBook
³https://www.beauhurst.com/research/the-deal-2026/
⁴https://news.crunchbase.com/startups/early-stage-funding-trends-2025/ 
⁵https://sifted.eu/articles/uk-vc-outlook-2025/ 
⁶https://pitchbook.com/news/reports/q1-2025-european-venture-report

Commentary from Erika McIntyre, Partner at Mishcon de Reya

The line between investment, VC fundraising and M&A continues to blur, with strategic investors increasingly seeking equity stakes as a precursor to full acquisitions. Many growth-stage companies are now exploring dual-track processes, raising capital while remaining open to strategic sale opportunities. This crossover is particularly evident in sectors such as technology and life sciences, where consolidation is accelerating.

Investor caution intensified through 2024 and early 2025, with buyers prioritising operational resilience, transparency and scalable business models. Deal structures now focus on bridging valuation gaps, using earn-outs and deferred consideration to align price with future performance. Capital is flowing to businesses with proven fundamentals, digital maturity and strategic growth, especially in technology, media and communications sectors. In today’s selective market, disciplined growth and structural strength are essential for attracting investment and ensuring deal execution.

Insights from Chris Driscoll, Partner at Mishcon de Reya

The US Venture Capital market demonstrated resilience in 2025, with total venture investment reaching approximately $170-180 billion, representing a stabilisation following the contraction experienced in 2022-2023. The artificial intelligence and life sciences sectors have unsurprisingly attracted substantial investor attention. Looking ahead to 2026, market sentiment suggests cautious optimism. The dry powder held by US venture funds, estimated at over $300 billion, is creating deployment pressure. In addition, a backlog of mature portfolio companies is expected to drive increased M&A activity as strategic acquirers and Private Equity firms seek quality assets.

For UK and European emerging companies considering US expansion and/or accepting US investment, the current environment continues to present a strategic opportunity. Whilst the US political climate remains noisy and subject to policy uncertainty, US investors are still actively seeking differentiated international companies with proven business models and US market readiness, particularly those that can demonstrate capital-efficient growth and clear competitive advantages in their sectors.

Deals:
100 transactions

Pre-seed and Seed funding rounds accounted for 62% of deals

Sectors:
Technology and AI 37%
Healthtech 13%
Life Sciences 6%
Fintech 8%
Greentech 5%

Technology and AI: investor momentum builds around compliance, generative tech and early-stage innovation

“2025 has seen a significant surge in investment into technology and artificial intelligence, with capital flowing into both infrastructure and application-focused ventures. The regulatory landscape for AI is evolving rapidly, with increased scrutiny on AI regulatory compliance and ethical deployment. Investors are responding by backing companies that demonstrate robust compliance and responsible innovation. Generative AI and infrastructure technologies are particularly attractive, as businesses seek scalable solutions and new commercial models.

Recent transactions in the sector include early-stage and growth investments in artificial intelligence and data-driven technology businesses. The market is seeing strong momentum in pre-seed and seed rounds, with notable activity in generative AI, data infrastructure, and automation.”

Trends:

• Growing focus on AI regulation and data governance.
• High investor appetite for generative AI and infrastructure tech.
• Early-stage deals dominate, reflecting confidence in long-term sector growth.

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Life sciences and healthtech: healthtech investment accelerates with cross-disciplinary innovation

“The life sciences and healthtech sectors continue to attract substantial venture capital, driven by advances in translational science and the growing importance of cross-disciplinary innovation. Investors are particularly interested in university spinouts and companies at the intersection of health, data, and technology. The appetite for early-stage and Series A funding remains strong, with a focus on scalable solutions addressing unmet medical needs.

Recent deals highlight the strength of the UK’s innovation pipeline, with capital deployed into life sciences, biotech, and digital health. University spinouts and research-driven ventures are prominent, reflecting the sector’s ability to translate scientific breakthroughs into commercial success.”

Trends:

• Strong venture appetite for translational science and healthtech innovation.
• University spinouts are a key source of deal flow.
• Cross-disciplinary approaches are driving new investment opportunities.

Featured deal

Mishcon de Reya advises Relation Therapeutics on strategic multi-programme collaboration with Novartis

Mishcon de Reya has advised Relation Therapeutics on its multi-programme, strategic collaboration with Novartis to discover and advance novel targets for atopic diseases. 

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Defence and deeptech: funding surges as national security becomes a mainstream investment theme

“2025 has marked a turning point for defence and deeptech investment, with dual-use technologies—those serving both civilian and military applications—attracting interest from Venture Capital. Investors are increasingly recognising national security as a viable and strategic investment theme, driven by geopolitical developments and the need for resilient infrastructure. The UK’s innovation ecosystem is well-positioned to support the growth of defencetech, with a strong pipeline of early-stage companies developing advanced hardware, AI-driven security solutions, and next-generation communications.”

Trends:

• Surge in funding for dual-use and defence-related technologies.
• National security increasingly now seen as a mainstream, investable sector.
• Early-stage innovation and cross-sector collaboration are key drivers.
• Looking at the trends and our own data, it’s clear that defence and deeptech are set to play a key role in shaping the future of UK innovation and investment.

Featured deal

Mishcon de Reya advises AI defence startup Arondite in £9 million funding round

Mishcon de Reya has successfully advised AI defence startup Arondite on its latest funding round.  

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Greentech and sustainability: regulatory clarity and scalable impact drive greentech’s growth

“The GreenTech and Sustainability sectors continued to accelerate in 2025, with innovation and university spinout activity of new greentech businesses remaining strong, and with investor appetite for net-zero and climate-aligned ventures reaching new heights. According to PitchBook’s Global Sustainable Investment Report, capital deployment into greentech and sustainability-focused businesses has hit record levels, reflecting a market-wide shift towards climate innovation and measurable impact.

The UK Government’s Net Zero Strategy and updated carbon reporting requirements have provided much-needed clarity for founders and investors alike. This regulatory certainty is unlocking new capital flows, as noted by UK Private Capital (formerly the BVCA), and encouraging more institutional participation in sustainable infrastructure and technology.

The trend is not limited to the UK. Across Europe, climate-focused innovation is leading the way, with substantial investment flowing into renewable energy, clean technology, and sustainable infrastructure. Net-zero goals now seem to be central to investment strategies, and greentech is driving the next wave of venture growth.

As the sector matures, founders are increasingly focused on delivering scalable solutions that offer measurable environmental impact, while investors are seeking opportunities that combine commercial viability with genuine sustainability. The convergence of regulatory clarity, investor demand, and technological innovation is setting the stage for greentech and sustainability to remain at the forefront of venture capital activity in 2026 and beyond.

Our own research shows that organisations that embed sustainability into core strategy and decision‑making are significantly more likely to deliver meaningful progress, strengthen alignment and boost reputation. As systemic risks escalate, demanding transformation over incremental change, enterprises that establish sustainable transition as the engine of strategic direction and business model innovation will be better positioned to secure capital, build resilience and compete in future‑fit markets.”

Trends:

• Regulatory clarity is unlocking new capital flows and driving institutional investment in greentech.
• Investor appetite for net-zero and climate-aligned ventures is reaching record levels.
• Organisations that make sustainability a central part of their strategy are more likely to achieve meaningful progress and enhance their reputation.

Featured deal

Mishcon de Reya advises Renew Risk in securing £5 million funding round led by Molten Ventures

Our clients, Renew Risk, have successfully raised £5 million in a funding round led by Molten Ventures, with participation from Lloyd's of London, and existing investor Insurtech Gateway.  

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Fintech: market maturity and atypical entrants defining the future of fintech

“In 2025, fintech has benefited from its maturing status in the innovation ecosystem and a first move advantage in the AI space. The opportunities that are opening for atypical innovators are emerging too, namely from the rise of embedded finance solutions through non-financial services platforms. Into 2026, we expect this to continue to broaden the definition of innovation in fintech, whilst international governments consider how to place the right guardrails for the end solutions that can derive from this. We’ll also continue to see the consequences of a maturing market with more significant M&A activity in the sector, akin to Calastone’s acquisition in a $1 billion deal, where we advised the management team.”

Trends:

• UK legislation on crypto assets is tacking towards positioning us as a world leader in digital finance, and we anticipate a resurgence in crypto asset ownership and the platforms looking to service these owners.
• AI will continue to provide volatility in the sector, from new entrants that are able to replicate and advance established innovators in the territories that they may not have reached yet to rising capability to build cheaper and faster distorting the early stage fundraising market.
• Expect consolidation driven by the thriving challenger banks and alternative payment providers, creating a more varied M&A market and a greater challenge for traditional operators to remain relevant through innovation acquisition.

Featured deal

Mishcon de Reya advises Sokin on their $50m Series B funding round

Mishcon de Reya has advised Sokin on all UK elements of its $50M Series B funding round. The round was led by Prysm Capital, with participation from Watershed Ventures, Morgan Stanley Expansion Capital, Aurum Partners, and a number of industry leaders and early backers.

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The UK continues to cement its reputation as a leading global hub for university spinouts, with the Oxford–Cambridge–London triangle at the heart of this activity. The region’s world-class academic institutions and research centres are driving a steady flow of high-potential ventures, particularly in life sciences, healthtech, and deeptech. Recent deal activity reflects strong investor appetite for spinouts, with capital deployed into early-stage companies commercialising breakthrough research and translational science.

“Oxford’s innovation ecosystem is accelerating into a new era, marked by major 2025 exits such as Oxford Ionics and OrganOx, signalling the global strength of its spinout pipeline. Larry Ellison’s significant investment in the Ellison Institute of Technology further reinforces Oxford’s position as a world‑leading hub where academia, industry and investors collaborate to drive transformative innovation.” 

“Cambridge’s ecosystem is equally lively, with a strong pipeline of technology and life sciences emerging, scaling and established companies benefiting from deep pools of talent and capital. As well as the traditional depth around life sciences and deeptech more generally, hot sectors include AI, semi-conductor technologies, quantum computing, data centres, energy storage, defence strategic tech and automotive. We are also seeing some very interesting plays at cross-disciplinary intersections e.g. AI x Automotive. This vibrancy continues to attract significant inward investment, including both strategic, institutional and governmental resources.”

The Oxford–Cambridge–London triangle remains the UK’s powerhouse for innovation, with founders having access to world-class individuals to grow their teams, experienced investors, and a supportive and collaborative infrastructure for scaling their ventures. Hayley Cross, Partner, has supported numerous university ventures in 2025 and notes: “It is clear that the early-stage capital is there with investors keen to invest in research-driven innovation and the founders that can commercialise it.” 

Looking at the growth of the market in the UK it is clear that university spinouts seem to be the cornerstone of the UK’s innovation economy, driving growth and attracting significant investment across the country’s leading academic regions. Strategically located within the Golden Triangle, we at Mishcon feel well positioned to continue contributing to the innovation economy and look forward to a successful 2026.

Mishcon de Reya has advised Cassi on its £500,000 pre-seed funding round, led by Twin Track Ventures. The round brings together expertise from defence, capital markets and growth equity. 

Cassi’s platform combines artificial intelligence, probabilistic modelling and collective intelligence to help organisations make better strategic and operational decisions. The technology enables leaders to define resolvable outcomes, quantify the probability of success and identify the factors that most influence results. Early benchmarks show Cassi’s forecasts outperform unaided human judgement by 50 percent, supporting boards and commanders in high-stakes decision-making across government, finance and critical infrastructure. 

Cassi was co-founded by Dr Keith Dear, CEO and former Expert Adviser to the UK Prime Minister, and Al Brown, Chief Technology Officer and former Royal Engineer. The company draws on deep experience at the intersection of national security, cognitive science and advanced computing. 

Cassi was co-founded by Dr Keith Dear, CEO and former Expert Adviser to the UK Prime Minister, and Al Brown, Chief Technology Officer and former Royal Engineer. The company draws on deep experience at the intersection of national security, cognitive science and advanced computing. 

The Mishcon de Reya team was led by Attilio Leccisotti who commented: "We’re delighted to have advised Cassi on this initial round. Having worked with such a pre-eminent founding team, who are real experts in their field, we're really looking forward to supporting Keith, Al and the team going forward and witnessing Cassi grow."

Mishcon de Reya has successfully advised Holiwise, a premium travel technology platform, on its €1.45 million pre-seed funding round. The round saw participation from senior executives at Google, Goldman Sachs, Blackstone, Barclays and more. 

Mishcon de Reya has successfully advised Holiwise, a premium travel technology platform, on its €1.45 million pre-seed funding round. The round saw participation from senior executives at Google, Goldman Sachs, Blackstone, Barclays and more. 

Founded by Albin Eriksson Lippe, Kristian Lexeklint, Apurva Amin and Maria Ancheta, Holiwise was born out of a desire to bridge the gap between mainstream online travel agencies and high-end travel concierges. The platform delivers personalised, premium travel experiences at the speed and price point of modern booking platforms, with over 300% growth this year and more than 80% customer retention. 

The Mishcon de Reya team was led by Chris Keen, Partner and Head of our Emerging Companies team, and Alexa Hamilton, Managing Associate.

Chris Keen, Partner at Mishcon de Reya, commented: 
“It’s been a real privilege working with Albin, Kristian and the Holiwise team on this round. What they’re building is genuinely exciting – a real shake-up of the travel space, and you can feel the energy and ambition in every conversation. For me, the best part of my job is getting to work alongside founders who are so passionate about what they do, and being able to help them get deals done, make connections, and keep things moving at pace. This is a brilliant milestone for Holiwise, and I’m looking forward to seeing where they go next.” 

Albin Eriksson Lippe, Co-Founder of Holiwise, said: 
“We’re thrilled to have had Mishcon de Reya by our side for this round. Chris, Alexa and the team brought invaluable expertise and a genuine understanding of the fundraising landscape. Their support has been instrumental in helping us reach this milestone, and we’re excited for what’s ahead as we continue to build Holiwise.” 

Mishcon de Reya recently advised drug discovery company Optibrium Limited on its multi-million-pound financing package from Shawbrook.  

Optibrium specialises in software solutions for drug discovery, particularly in the field of small molecule design and optimisation and the company collaborates with a broad range of customer with its products being deployed by over 160 organisations worldwide, including leading global pharmaceutical companies. 

Mishcon de Reya recently advised drug discovery company Optibrium Limited on its multi-million-pound financing package from Shawbrook.  

Optibrium specialises in software solutions for drug discovery, particularly in the field of small molecule design and optimisation and the company collaborates with a broad range of customer with its products being deployed by over 160 organisations worldwide, including leading global pharmaceutical companies. 

The deal will allow the company to strengthen its offering for global pharmaceutical and biotech teams and boost the speed and efficiency of their drug discovery process. 

Mishcon de Reya's Corporate Innovation and Venture Capital team was led by Erika McIntyre with support from Patrick Neall. 

Mishcon de Reya advises IVFmicro on its £3.5 million pre-seed funding round 

Mishcon de Reya has advised IVFmicro, a University of Leeds spinout, on its £3.5 million pre-seed funding round led by Northern Gritstone, with support from the Innovate UK Investor Partnerships Programme. 

The investment will enable IVFmicro to progress to its next phase of verification and validation, including trials on human embryos in fertility clinics. 

IVFmicro is addressing the global challenge of fertility, with one in six couples affected and IVF success rates remaining low - only 25-30% for women under 35. The company’s microfluidic device is the first of its kind designed for use in any IVF cycle, improving embryo culture by reducing repetitive handling and subjective selection, and increasing both the quality and number of viable embryos. Early results show a 10-15% improvement in embryo quality and quantity, significantly enhancing the chances of pregnancy. 

Founded in 2018 by Professors Virginia Pensabene and Helen Picton, IVFmicro brings together expertise in microfluidics, reproductive biology and embryology. The company recently participated in the NG Studios life sciences programme, delivered by KQ Labs, the Francis Crick Institute and Northern Gritstone. 

The Mishcon de Reya team drew upon experts in university spin out transactions from the firm’s Corporate, Innovation and Employment departments.  

Emma O'Rourke, Corporate Associate, commented:  

"We are thrilled to have supported IVFmicro on this major fundraising step and are proud to be associated with such a significant device and truly inspiring female founders. We're excited to be on the journey and are looking forward to continuing to work with Virginia and Helen as the business grows and develops." 

“The team in Mishcon is very responsive, insightful and very experienced in all topics relevant to a technology business. We have interacted with multiple firms in the past the quality of service is excellent and beyond market expectations.”

Legal 500, 2025

As we look to 2026, the UK and global venture capital markets are poised for further evolution. The trends observed in 2025: strong early-stage activity, sectoral shifts, and strategic capital deployment; are set to continue, with several key developments on the horizon.

Predicted market trends:

Consolidation in AI and life sciences
The surge in AI and life science investment is expected to drive consolidation, as larger players seek to acquire innovative start-ups and university spinouts. This will likely result in fewer, but larger, deals and a more competitive landscape for emerging companies.

Increased defencetech funding
Defence and dual-use technologies will likely attract greater attention, with national security remaining a strategic investment theme. The UK’s strong pipeline of deeptech ventures is well-placed to benefit from this trend, supported by both public and private capital.

Greater alignment between ESG and Venture returns
Environmental, social, and governance (ESG) factors will become increasingly central to venture investment decisions. Investors will seek opportunities that deliver both financial returns and measurable impact, particularly in greentech, health, and sustainable infrastructure.

“We expect to see continued consolidation in AI and life sciences, with strategic acquisitions shaping the next wave of innovation. Defencetech will certainly remain a growth area, and ESG considerations will be integral to venture returns. The UK’s innovation ecosystem is uniquely positioned to lead in these sectors, and our commitment is to support founders and investors as they navigate this changing landscape. It’s looking like 2026 will be a year of opportunity and transformation for the venture capital market and, as always, the team at Mishcon de Reya remains dedicated to the innovation ecosystem, helping clients deliver at the edge of what’s possible.”

With five years’ experience supporting and scaling legaltech businesses internationally, and having advised over 600 companies to raise more than £2.5 billion since 2020, Mishcon de Reya understands the unique challenges of the fundraising process.

Mishcon PLUS combines financial support with deep legal expertise, allowing us to act as a true partner to our clients on their journeys.

What is Mishcon PLUS?

Mishcon PLUS provides early-stage companies with a business-boosting investment of up to £100,000, available as part of a current or upcoming funding round. This is paired with the fundraising legal services and expertise of Mishcon de Reya, ensuring founders have both the financial backing and the strategic guidance to scale confidently.

Our portfolio

Since its launch in March 2024, Mishcon PLUS has partnered with 10 fast growth companies across the London, Cambridge, and Oxford innovation ecosystems, helping founders turn vision into reality.

“Mishcon PLUS was designed to complement the advice we provide to fundraising clients who operate at the forefront of innovation.  We are proud to have been able to participate in these rounds and look forward to supporting our portfolio through their next chapters of growth and beyond”.

It has been such a privilege to work with the PLUS team and get to know the wider Mishcon family. From benefitting from a wide source of expertise (legals, commercials, fundraising, growth, PR), a wealth of invaluable resources for busy founders, all the way to working with seasoned investment professionals - the Mishcon team provides it all. PLUS has been a huge source of help and considered input - they really know and understand founders - and can therefore support them from MVP to scaling in a really cohesive manner!

Bianca Rangecroft, Founder & CEO, Whering

"Having Mishcon invest was really valuable to us as part of our round. Investors loved this and thought it was innovative/standout from others in the market. Interestingly I had 5 separate investors ask and clarify that it was a cash investment rather than a fee write off. As a founder I love the idea that a partner who is integral to our growth is investing for the long-haul and backing the relationship and future success. Too many say they are in it to the end, so this is great to see MDR’s money where their mouth is. MDR investing definitely stands them out as innovative, progressive, forward looking and in for the long-run - this is the type of firm I want to work with."

Max Munford, CEO and Co-Founder, OSSTEC

"Working with Mishcon has far exceeded our expectations of a law firm. It's been fantastic to have the investment from Mishcon PLUS and the investment process itself was incredibly smooth. They've been kind enough to open their network to us, helping the business progress, and of course having them as investors means that we know that they are in our corner for the years to come! It’s incredibly easy to work with Mishcon in a way that I haven't seen with other law firms."

Simon Toller CFO and Co-Founder of ekko.

“Our Emerging Companies and Venture Capital teams remain deeply embedded across the Innovation ecosystem, supporting entrepreneurs and investors who drive the innovation economy. Throughout 2025, we’ve been present at the Cambridge Tech Showcase and London DeepTech Showcase, brought together in-house legal professionals at our In-House Counsel Day, and shared practical insights at our Making an Exit event. With a strong presence in London, Cambridge and Oxford, we stay close to the market, building relationships and sharing expertise with founders, TTOs, spin-outs and social ventures. Our experienced lawyers combine real sector knowledge and understanding in Technology, AI, Life Science, Healthcare, SaaS, EcoTech, E-commerce and Retail with practical, no-nonsense and frank advice, ensuring our legal support is both relevant and connected to these fast-moving industries.”

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In this guide, we provide a series of checklists designed to help you prepare for exit. By identifying and addressing potential issues at an early stage, it will save you time later in the sale process and reduce the risk of complications that could jeopardise your deal.

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Whether it’s your first funding round or you are gearing up for a later stage investment, we provide practical solutions and specialist funding advice. We have deep sector experience and significant expertise in advising emerging companies at all stages of their business life-cycle. Visit our hub to see how our team can assist you on your growth journey.  

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