AlbionVC’s Deep Tech and Future of Compute Report reveals a shift toward larger deals in deeptech, especially within Future of Compute, which focuses on advanced technologies like quantum, neuromorphic, and photonic computing. It highlights how, for the first time, UK companies in this space have access to the capital needed to scale independently, paving the way for the development of a self-sustaining deeptech ecosystem in the UK.

In 2015, no equity deals in Future of Compute exceeded £10 million, but by 2024, nearly 40% did. This marks a notable transition towards larger investments, as deals under £100,000 have steadily declined, representing just 3% of all transactions in 2024. The trend highlights investors’ preference for fewer, higher-value deals and the capital-intensive nature of computing innovation.

Companies in the Future of Compute space secure, on average, £5.3 million more per deal than their deeptech counterparts, reflecting this field’s higher infrastructure, talent, and R&D costs, essential for technological breakthroughs and scaling.

Further illustrating the ecosystem’s maturation over the years, the research shows that equity investment in Future of Compute totalled just £3 million in 2015. By 2024, this had surged to over a quarter of a billion (£284 million). The momentum continued with 12 investment rounds exceeding £10 million in 2024, double the number in 2023.

Among the 64 deals in 2023/24, leading Future of Compute investors include Parkwalk Advisors, which participated in eight deals worth over £2 million between 2023 and 2024, followed by Oxford Science Enterprises and AlbionVC, both of which continue to support growth through follow-on investments. Notably, the largest funding recipients were all quantum computing companies – highlighting the sector’s pull for investment. Oxford Quantum Circuits led with £79.5 million raised, followed by Riverlane with £73.6 million, and Quantum Motion securing £42.5 million.

David Grimm, Partner at AlbionVC, said: “The Deep Tech and Future of Compute Report shows how the UK is emerging as a global leader in these industries, particularly in fields like quantum computing – now among the fastest-scaling in deep tech and where we’re seeing world-class innovation driven by university spinouts and cutting-edge research.

“The rapid growth in larger deal sizes, over £10 million, showcases the UK’s potential to build a sovereign deeptech ecosystem, with the capital base to scale companies into global leaders. It demonstrates the need to back the UK’s exceptional engineering talent and sustain support for early-stage research to ensure we remain at the forefront of the next wave of deep tech and quantum breakthroughs. The recent reduction in grant funding risks slowing down innovation at its earliest stages, where these breakthroughs often emerge.”

With Future of Compute largely driven by university-led innovation, the report highlights the academic institutions at the forefront of this field, analysing the number of spinouts from 2015 to 2024. The University of Oxford leads with eight spinouts, followed by the London ecosystem (Imperial College and UCL combined) and the University of Cambridge, both with six.

However, the report highlights the need to ensure sustained investment in universities and early-stage research to maintain momentum. Despite strong private investment in a sector that’s vital to the UK economy, grant funding has seen a decline, with only £28.9 million secured in 2024, down from £34.3 million in 2023. Without adequate support, the UK could face challenges in maintaining its competitive edge in this sector.

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