2026 ScaleUp Outlook: Key Implications for UK Founders

Following the launch of The UK ScaleUp Investment Report, it is clear that while £17 billion was invested in innovative UK companies in 2025, accessing capital is still one of the biggest barriers faced by scaleups. For founders preparing to navigate the investment landscape in 2026, the report highlights several specific realities. Below we recap the key implications for founders raising this year.

1. The "ScaleUp Gap" is a precision task

While around 6,000 companies raised seed rounds (sub £2m) in 2025, fewer than 500 companies raised Series A and 110 raised Series B. This indicates that 93% of seed-funded startups are failing to access follow-on funding.

The Implication: Raising scaleup investment is a precision task that requires skilled preparation. Funding remains available, but only for companies able to show the right data and share the right vision.

2. Flat average cheque sizes

Average cheque sizes in the UK have remained at a consistent level for the last decade, averaging £4.6m for Series A and £14.6m for Series B.

The Implication: Because these levels have remained flat, UK scaleups risk being under-capitalised at the start of their scaleup journey. Founders should plan their capital requirements against these consistent market averages and consider supplementing with alternative funding options.

3. Regional and Sector Concentration

London further consolidated its dominance in 2025, with its volume of £2-10m deals rising 27.3% and accounting for 68.5% of all dealmaking. Conversely, deal activity declined in Cambridge, Edinburgh, and Manchester. By sector, AI-native startups saw a 295% increase in the number of companies raising funding compared to the previous year.

The Implication: Access to growth capital remains uneven across the UK, with gaps particularly evident outside the South East. Founders in other regions may face additional structural barriers when seeking investment. VenturePath's digital platform helps prepare founders for investment and connects them with the right investors at the right time, helping to resolve these gaps.

4. Expansion of Policy and Tax Relief

2025 saw significant policy changes, including the increases to the annual and lifetime fundraising caps for companies raising from both EIS investors and VCTs. EIS was previously tailored to small businesses. It worked well for seed stage companies but felt restrictive once a company began to scale.

The Implication: Companies will be able to raise larger rounds while still offering investors EIS/VCT tax advantages. The annual limit for a standard company has increased from £5m to £10m, with the lifetime limit increasing from £12m to £24m. Similarly, the annual limit for knowledge intensive companies has risen from £10m to £20m, with their lifetime limit increasing from £20m to £40m.

5. Talent Retention: The EMI Expansion

A major win for scaleups is the substantial expansion of the Enterprise Management Incentive (EMI) scheme - a tax-advantaged option plan designed to help high-growth companies acquire and retain talent. Maximum Employees: Increased from 250 to 500, Maximum Gross Assets: Increased from £30 million to £120 million and Share Option Value: Increased from £3 million to £6 million.

The Implication: Employees pay no income tax or NICs on the grant or exercise of options and potentially benefit from a 10% CGT rate. For employers, this means a greater ability to compete for senior talent against larger corporates while benefiting from corporation tax deductions.

Summary

The UK remains the third largest venture capital market globally, but the "missing rungs on the funding ladder" continue to impact the scaleup pipeline. Increasing company readiness to attract VC funding is essential to improve the success rate of UK scaleups in 2026.

You can see the full UK ScaleUp Investment Report here.

At VenturePath, we support founders to attract Series A-B funding rounds, from great investors on great terms, with the least disruption to running their business. We have raised £730m+ for UK scaleups to date.