Sector spotlights

With in-depth commentary from lead partners across Mishcon de Reya, we highlight the key sectors driving investment and growth; examining the trends, opportunities and challenges.

Ashley Williams, Head of Technology

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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Patrick Farrant, Partner

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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Toby McCrindle, Partner

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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Hugh Tebay, Partner

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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Charlotte Wilson, Partner

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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