UK biotech financing January–March 2025

UK biotech financing in Q1 2025 saw a sharp rise in overall equity financing, reaching £924 million across venture capital and follow-on funding. This represents a modest decline compared to £987 million in Q1 2024 but masks a shift in where capital is flowing.

The venture capital total was £881 million, more than double the previous year. However, this impressive figure is largely driven by just two megadeals, suggesting investor attention is concentrating on a small number of standout companies rather than the broader market. The number of VC deals fell to 15 this quarter, down from 18 in Q1 2024, also highlighting a more selective investment climate.

Meanwhile, follow-on financing fell sharply to just £43 million, down from £617 million a year ago. The drop-off reflects the absence of large cap raises and growing investor caution on public markets, particularly in the US, where uncertainty around elections and interest rates may be causing some companies to delay NASDAQ offerings. Instead, the UK saw a greater proportion of smaller AIM market raises, indicating a shift toward domestic financing options. IPO activity remains stagnant, with no UK biotech companies debuting on public markets during the quarter.

The UK’s biotech sector continues to draw global interest at the highest levels, but these figures reinforce the need for policy momentum. Unlocking long-term domestic capital sources, such as pension funds, and strengthening scale-up support will be key to sustaining this growth.