Looking ahead to 2026

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.

Chris Keen, Partner and Head of Emerging Companies

“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.”