The AI Index
We’ve spent months crunching data, surveying founders, and speaking to founders. Today, Startup Coalition is publishing its inaugural AI Index – the first comprehensive profile of the UK’s top 1,000 AI startups and scaleups by raise.
The headline numbers are substantial. These 1,000 firms have collectively raised £20.2 billion, command valuations exceeding £45 billion, and in 2025 employed more than 35,000 people.
We also found that:
The UK’s strength is in application. The top three sub-sectors for companies in the AI index to be operating in include: business services, followed by financial services and health. The Index shows companies embedding AI into workflows, products, and services across the economy. This matches what the founders told us: the UK can win at the application layer.
London’s dominance is striking. 649 of the 1,000 firms — 65% — are headquartered in the capital. London-based startups account for £14 billion of the £20 billion raised, or 70% of total funding. There is no doubt that the capital continues to attract the majority of talent and capital.
Software is racing ahead of hardware. 968 software firms versus 74 hardware companies. A funding ratio of more than 10:1. The UK’s strengths appear not to be clusters of hardware companies, but of wider penetration of AI into existing sub-sectors in the application layer. Indeed, whether this is rational specialisation or strategic vulnerability will likely depend on your view of where value will accrue as the stack matures.
The state is a minor player. £456 million in grants against £20 billion in private funding means the government is providing just 2.2% of capital.
Beyond the data, we also surveyed AI founders and spoke to founders in roundtable settings and through depth conversations. Some consistent themes emerged:
Procurement remains broken. Companies want to sell to the government but find risk-averse culture, opaque processes, and lengthy timelines incompatible with startup runways. The Ministry of Defence’s ringfencing of spending for British companies was praised, and founders want this model extended across the Government.
Celebration matters more than handouts. Similarly – UK startups want contacts not grants. The “halo effect” of ministerial endorsement helps with customers, investors, and talent acquisition. Currently, even NHS reports are praising outcomes from the product that startups have developed but have avoided naming the companies delivering them.
Data availability is the next frontier. The national data library announcement was welcomed, but founders want clarity on what data it will actually unlock across sectors. Similarly eyes are on what the Health Data Research Service (HDRS) will deliver.
The full report contains detailed policy recommendations, but here is the short version:
Open up AIRR for startups — compute access shouldn’t be reserved for incumbents
Fix procurement — ringfence spend, lower thresholds, give commissioners air cover to back innovative suppliers
Reform spinout policy — university equity stakes have fallen but remain too high
Celebrate success loudly — the Government’s megaphone costs nothing and matters.
Move at startup speed — AI Growth Labs need to come online in 2026, not 2027 or even later.
The AI Index was produced in partnership with Beauhurst, with support from CoreWeave. Thanks to the dozens of founders who participated in our survey and roundtables.