The rise of regional first-time investment in the UK

In 2025 – for the first time since 2022 – more first-time fundraisings were completed outside of London (1,386) than inside it (1,337). In the first half of 2026, the trend accelerated even further.

This new data, taken from a report published by Penningtons Manches Cooper and Beauhurst Insights – State of UK First-time Investment 2026 – hints at one of the ways in which the UK first-time equity market is changing as it experiences a resurgence.

This article takes a look at how this growth throughout 2025 and 2026 can be viewed through a geographic lens – what does the regional rebalancing look like, and why might it be happening?

Background – a growing market

As indicated by the State of UK First-time Investment 2026 report, 2,730 companies raised equity for the first time in 2025, representing a 29.9% increase year-on-year, and meaning that more companies secured external funding than at any point in the last four years.

Collectively, those companies raised £4.4 billion, an increase of 11.7%. The momentum has continued into 2026, with 1,221 companies securing first-time equity investment in the first half of the year, raising a combined £2.11 billion.

Conversely, the average first-time fundraising fell from £1.97 million in 2024 to £1.67 million in 2025, with the median down 20% to £200,000. The overall picture of the market, therefore, is one where more companies are getting funded, but investors acquiring a given stake are committing less capital.

London continues to dominate

London, unsurprisingly, is still by far the largest market for first-time fundraisings. It accounted for 1,337 deals in 2025, over four times the number of the next largest region, the South East, which saw 325 deals.

The story is much the same for amount raised – in 2025, deals in London raised a total of £2.14 billion, 48.7% of all investment. No other region raised more than Scotland’s £535 million.

While a region’s equity total can sometimes be dictated by one outsized individual fundraising, in London its shares of 48.7% of total equity and 49.1% of total deals were within half a percentage point of each other, and, on average, the amount raised was actually lower than the rest of the UK – £1.64 million against £1.71 million. Put together, this suggests that London’s advantage is in the number of companies reaching the market, rather than the terms they secure.

Significant regional growth

Growth, however, was fastest outside London. The number of first rounds rose 33.2% outside the capital, against 27.2% inside. Particular success stories included the West Midlands (up 95.9%), Northern Ireland (up 72.7%), and Scotland (up 59.7%).

As a result, for the first time since 2022, more first-time deals were completed outside the capital than inside of it (50.9% vs 49.1%). Interestingly, this gap has grown even further in the first half of 2026, with London’s share falling to 44.7%, a suggestion that the regional rebalancing is deepening rather than levelling off.

Why are regions gaining more funding? One key could be in the lower median valuations previously mentioned. It is likely that, with investors paying less in 2025 for any given stake than they were in 2024, the result has been a more accessible market that draws investment from a geographically diverse pool.

How investment is changing in cities

Cities themselves are also driving the changing face of first-time investment in the UK.

Besides London, the city with the highest deal count was Manchester, which witnessed 46 deals – in the 12 months leading up to H1 2026, when compared with 2023–2025, its average deal value rose too. Shortly behind Manchester were Edinburgh (40) and Birmingham (33), both of which have a portfolio of newly funded companies raising above average first-time rounds.

It is another reflection of London’s scale that Manchester ranks seventh nationally for deals, behind Westminster, Camden, Hackney, Islington, the City of London, and Southwark. Focusing on these areas within London does, however, reveal some interesting insights into how activity is changing not just outside the capital, but within it as well.

Both the number of deals and their value have fallen in the established markets of Westminster and the City of London, with first-time activity redistributing toward Camden (185 deals), Hackney (159) and Islington (149), which now rank 2nd to 4th nationally. Why? One answer could be that all three areas host an innovation cluster, with Hackney and Islington on either side of Tech City, and Camden centring on King’s Cross, home to Google’s UK headquarters and the Knowledge Quarter.

Conclusion

The report’s headline, that the UK first-time equity market is growing, is an encouraging one, but it does not tell the whole story. Just as important is to recognise how it is growing, for which regional considerations are key.

The picture painted by the report is one where, as expected, London is by far the largest market, but the formation of regional first-time investment ecosystems is shifting the balance back towards areas outside the capital. As managing director at Beauhurst Insights, Henry Whorwood, comments, “The fact that the regional swing in first-time deals has continued into the first half of 2026, with London’s share falling further… points to a structural change, rather than a temporary shift”.

To read the State of UK First-time Investment 2026 report in full, click here.