In Short

• Believ, an EV charging firm, secured £251 million.
• Popular sectors in the region include clean technology, AI, and advanced manufacturing.
• It is the first time that venture funding has shown resilience.

Venture capital (VC) investment, particularly in clean technology, increased in the South West of England in the second quarter of 2025, notes a report by KPMG.

The region attracted 21 investment deals, up from 15 in the first quarter, and recorded a 29% increase compared to the previous three months. While the rest of the UK saw a dip in VC funding during the same period last year, the total amount raised bounced from £29.3 million to £37.9 million.

Among the deals, the one that stands out in the South West was by Q5D, a Portishead-based business, which raised £10.1 million for the development of its robotic systems. Apart from this, the region also attracted deals in several other sectors, such as clean technology, advanced manufacturing, life sciences, defence, and artificial intelligence (AI). These industries are also central to the UK Government's Industrial Strategy.

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David Williams, KPMG’s South West senior partner, said: "It’s encouraging to see the South West’s start-up community staying resilient amidst a backdrop of slowing deal activity across the UK.

“There’s real momentum behind the region’s future-focused businesses – especially in clean tech, advanced manufacturing and AI.

“These companies aren’t just attracting investment, they’re helping to drive the UK’s next wave of high-growth industries and cementing the South West’s role as a centre for innovation.”

On the other hand, VC market growth declined nationally, with total investment falling from £3.8 billion to £2.6 billion. The researchers primarily attribute this to reduced activity from corporate investors.

However, AI has become a hotspot, with other major deals closely following — including £251 million for EV charging firm Believ (London), £223 million for cloud computing company XY Miners (Brighton), and £148 million for health tech company CMR Surgical (Cambridge). They placed the UK in the top 10 in Europe for VC funding.

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Nicole Lowe, UK head of KPMG’s emerging giants practice, said: “While quarter two marked the slowest quarter for UK venture capital since early 2020, the long-term outlook remains strong, particularly in AI.

“We’re seeing growing confidence from investors in the UK’s innovation ecosystem, and the government’s significant AI-focused commitments, including job creation and infrastructure investment, signal a clear intention to position the country as a global leader in next-generation technologies.”

Ends/

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Source: The Business Desk