Nicole Lowe, UK Head of KPMG’s Emerging Giants practice, said:
“We had four out of 10 of the largest deals in Europe and 85% of all investment in the UK centering around London, cementing the capital as one of the top three global hotspots for investors now and in the future.
“It is really encouraging to the see the UK record one of its best ever quarters in terms of VC investment, helping maintain its position as number one in Europe and set strong foundations for the year ahead.
“It is also pleasing to see the country continue to excel when it comes to being a home for AI and energy related organisations and, at the same time, embracing industries on the cusp of major growth such as dual use tech and self-driving vehicles.
“Despite ongoing headwinds from geopolitical conflicts and trade concerns, these findings show the UK is being recognised for its attractiveness for investors – something that show no signs of slowing in the coming weeks and months.”
Anna Purchas, London Office Senior Partner at KPMG UK, said:
“London’s companies are seizing some of the biggest opportunities in AI, energy and defence, and investors are clearly backing that ambition.
“The concentration of megadeals underlines London’s ability to attract serious capital for high-impact ideas. We lead in Europe, there’s real momentum here and we should be confident in that. The focus now is on sustaining that momentum by making sure we have the skills and infrastructure in place to support these businesses as they scale and succeed.”
Elsewhere in the world, global venture capital investment more than doubled from £98 billion in Q4’25 to a record £246 billion in Q1’26 across 8,464 deals.
Conor Moore, Global Head of KPMG Private Enterprise, KPMG International, said:
“Q1 2026 marked a very strong start to the year for VC investment across all regions of the world, with megadeals occurring on a scale far beyond anything we’ve seen before. While the Americas - entirely due to the US - reached an extraordinary record high, both Europe and Asia also saw very healthy investment. AI remained the dominant investment theme, with interest pouring not only into large language model focused companies, but increasingly into startups focused on the application of AI across industries and verticals.”
Looking ahead to Q2 2026, geopolitical tensions will remain a key watchpoint for the VC market, particularly in the Americas and Europe as higher oil prices and renewed inflation concerns create a more fragile backdrop for investment.
AI is expected to remain the top focus for VC investors globally and is also expected to draw increasing M&A activity. More broadly, defence tech, space tech, and cybersecurity are expected to attract growing interest from VC investors given the more volatile and uncertain global environment.
