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AI grabs 44% of UK smaller-business equity funding

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Artificial intelligence accounted for a record 44% of UK smaller-business equity investment in 2025, according to the British Business Bank. Overall equity funding for smaller businesses fell 4% to £12.3 billion.

The bank’s Small Business Equity Tracker found that investors concentrated capital into fewer, larger transactions, with the 10 biggest fundraisings accounting for 23% of total investment, the highest share since 2020.

AI companies also made up 26% of all deals in the smaller-business equity market, almost double their share in 2022. Investment in AI-related deals rose 48% year on year, underscoring the sector’s growing influence on capital flows across the market.

The figures suggest larger AI transactions are offsetting weaker conditions elsewhere. That pattern continued into the first quarter of 2026, when a small number of AI megadeals lifted total investment even as funding conditions for smaller businesses remained subdued.

Early-stage pressure

Outside the biggest transactions, the picture was weaker for younger companies seeking capital. Seed-stage deals fell 27% in 2025, while venture-stage deals dropped 13%.

Growth-stage investment was more resilient, suggesting investors remained willing to back more established businesses while becoming more selective earlier in the funding cycle. Digital and Technology remained the largest recipient of equity investment overall.

Other sectors had a mixed year. Advanced Manufacturing recorded strong growth in investment value, while Financial Services and Life Sciences declined. Clean Energy and Creative Industries were broadly steady by investment level despite a fall in deal numbers.

Spinout activity

The report also highlighted the role of university spinouts in the UK funding landscape. Venture capital deal volumes for spinouts rose 95% in 2021-2025 compared with 2016-2020, outpacing the United States, Germany and France.

Measured against the size of the research base, the UK also had the highest number of venture capital-backed spinouts among those international comparators. This points to strong conversion of academic research into equity-backed companies, even as wider market conditions have become more challenging.

Yet the most recent year showed a slowdown. Equity deals involving UK spinouts fell 33% in 2025 and investment value dropped 51% from the previous year.

The British Business Bank supported a higher share of spinout deals than of the wider market. It backed 16% of spinout deals, compared with 12% across the overall market.

Regional shift

Investment patterns also shifted geographically. The North West recorded an 82% rise in equity investment in 2025, while Scotland rose 74% and the South West increased 104%.

Those gains were tied to a small number of large deals in AI and energy. London still accounted for the biggest share of UK equity investment, but its share fell to 57% in 2025 from 60% in 2024, indicating a modest easing of the capital’s dominance.

Between 2023 and 2025, the bank supported 15% of all deals and 16% of total investment, with a particular focus on innovation-led businesses, including AI companies.

That intervention is part of a broader investment push. After publishing its five-year strategic plan, the bank increased the pace of deployment with the aim of unlocking about £26 billion of private capital alongside £13 billion of its own funding over five years.

It is also deploying £4 billion to support businesses in the government’s eight industrial strategy sectors. Separately, it has committed £2.6 billion to back entrepreneurs across the UK, including through two new Nations and Regions Investment Funds.

A broader international comparison in the report found that UK venture capital investment overall was 32% lower than the US in 2023-2025 when adjusted for the size of the economy. The bank noted that the US figure was influenced by a small number of exceptionally large deals over the same period.

Leandros Kalisperas, Chief Investment Officer at the British Business Bank, said: “While we are seeing signs of the market cycle playing out, the British Business Bank is accelerating deployment of investment across the cycle, and ensuring promising businesses can continue to access the finance they need to start, scale and stay in the UK.

“The concentration of investment into AI highlights both the scale of the opportunity and the challenges within the wider market. Ensuring capital is available across sectors and stages will be critical to maintaining a diverse and competitive pipeline of UK companies.”

Michael Moore, Chief Executive at UK Private Capital, said: “The UK should celebrate the strength of our spinout ecosystem – outpacing the US, France and Germany is no mean feat, but it’s important that we build on this competitive advantage in years to come.

“The British Business Bank is playing an important anchor role in helping develop this ecosystem and growing an investor base of larger VC funds. Nurturing these start-ups and ensuring they can access the right capital at the right time will encourage more companies to scale and stay in the UK.”



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New Banbury pottery cafe enjoys successful opening weekend

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Blossom Pottery Cafe opened on Friday, August 14 at 18 South Bar, bringing a new artistic opportunity to coffee, tea and cake lovers in the town.

Opening the cafe was a long-standing dream of owner Wendy, who began pottery as a personal hobby and gradually developed the idea of creating a space where people of all ages can enjoy the peaceful pass time.

Blossom Pottery Cafe BanburyPottery painting sessions of bisque fired pieces are hosted daily (Image: Blossom Pottery Cafe)

With every table full on opening weekend and dozens of beautiful pieces newly painted by guests, the owner said her ‘heart is so full’ to see the dream realised.

“So grateful to see so many of you coming to support us on our opening day,” she shared. “Thank you so much.”

Blossom Pottery Cafe BanburyOwner Wendy said her ‘heart is so full’ after the support shown during the opening weekend (Image: Blossom Pottery Cafe)

Wendy earlier said: “We’re incredibly excited to be opening Blossom Pottery Studio & Café and bringing something new to Banbury.

“We hope it becomes a place where people can take a break from their busy lives, enjoy being creative, and make lasting memories with family and friends.

Blossom Pottery Cafe BanburyCustomers who visited during the opening weekend got free cupcakes (Image: Blossom Pottery Cafe)

“The support we’ve received from the local community has been amazing, and we can’t wait to welcome everyone through our doors.”

As part of the grand opening, all customers who visited during the opening weekend or made a pottery painting booking within the next three months received a free cupcake from the cafe.

Blossom Pottery Cafe hosts family-friendly pottery painting sessions from 10am each day, with normal cafe opening hours 8am to 5pm.





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Apprentices say AI is reshaping tech skills demand

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Atos highlighted the views of three apprentices entering the technology industry, focusing on apprenticeships as a route into tech as artificial intelligence reshapes workplace skills.

All three work as First Line Service Desk Apprentices and described a jobs market in which technical knowledge alone is not enough. Alongside coding and troubleshooting, they said communication, customer service, problem-solving and adaptability have become central to early careers in IT.

Kyle Brady said he moved into an apprenticeship after studying physics, maths and computer science at A level, then spending time in temporary work, including as a forklift driver, while building his technical skills independently. The apprenticeship, he said, offered a way to gain workplace experience while continuing to learn.

His account points to a common hurdle for new entrants: gaining practical experience before securing a first role. Brady said that challenge shaped his view of what employers value in technology jobs.

“After completing my A levels in physics, maths and computer science, I knew I wanted a career in technology. I’ve always enjoyed solving problems and understanding how things work, but I found it difficult to get my foot in the door. I spent some time in temporary jobs, including as a forklift driver, while building my technical skills in my own time. When the opportunity to start an apprenticeship came along, it felt like the perfect way to gain real workplace experience while continuing to learn.

“One of the biggest things my apprenticeship has taught me is that a career in tech is about much more than technical knowledge. Working on the helpdesk has shown me how important communication, customer service and problem-solving are. Being the first point of contact for users has completely changed how I see the industry and helped me develop skills I never realised I’d need. The experience has also shown me how quickly technology is evolving, especially with AI becoming part of more workplaces. That means the ability to keep learning and adapting is becoming just as important as technical skills. My apprenticeship has helped me build that mindset while giving me hands-on experience with the realities of working in IT.

“It’s also opened up opportunities I wouldn’t have had otherwise. Learning about career paths in cybersecurity and data engineering has shown me the range of opportunities available and given me confidence about where my career could go next. I’d encourage anyone thinking about a career in technology to keep an open mind and not feel like university is the only route. Apprenticeships give you the chance to earn while you learn, develop practical skills from day one and build the confidence to adapt as technology continues to change. In an industry being transformed by AI, that real-world experience is invaluable,” Brady said.

Ryan Cresswell said he studied IT at college and games design at university before working in sales to strengthen his people skills. He later returned to technology, but said employers often wanted practical IT experience as well as qualifications.

His experience reflects a wider issue for people seeking entry-level technology roles. Employers often ask for evidence of workplace readiness even for junior positions, making apprenticeships one way to bridge the gap between education and employment.

“After studying IT at college and games design at university, I began working in sales to hone my people skills before returning to technology. One of the biggest challenges I faced while applying for jobs in tech was that employers liked my qualifications but wanted candidates with hands-on IT experience. That made it difficult to get my foot in the door.

“My apprenticeship has given me the opportunity to earn, learn and gain practical experience at the same time. It’s allowed me to develop my technical troubleshooting skills, but I’ve also learned a lot about communication, problem-solving and handling different types of people. My advice to anyone considering a career in tech is to explore the different paths available. In the past it felt like university was the only choice, but that’s no longer the case. Also, speak to people already working in the industry and stay curious. Apprenticeships are a great way to build skills, confidence and hands-on experience, whether working individually or in a team, while discovering what’s right for you. The most important thing is to keep learning and not be afraid to take a different path if the first one doesn’t work out,” Cresswell said.

Skills shift

Zainab Hussain said she chose an apprenticeship because it offered immediate workplace experience and a path into more senior roles without student debt. She said the role had helped her develop both technical and interpersonal skills, including troubleshooting problems and explaining complex concepts clearly.

Her comments underscore how apprenticeships are being framed by employers and trainees as an alternative to university for some digital roles. In this case, the appeal lies in earning while learning, building professional networks and gaining direct exposure to the daily demands of IT support.

“I’m naturally drawn to tech and have always been IT literate, so I knew it was the right path for me. It’s an industry that’s constantly evolving, and I wanted to be part of that. I chose an apprenticeship because it felt like the best way to gain real experience from day one, and it sets you up to move into higher roles faster than if you go to university. I also wanted to build a career in the industry without taking on student debt.

“My time at Atos so far has helped me develop both my soft and technical skills, such as how to troubleshoot problems and communicate complex concepts clearly. I’ve also had the chance to earn, learn and build my experience, all of which are helping prepare me for the next stage of my career. The apprenticeship path has given me valuable opportunities to network with co-workers from different career backgrounds and skill sets, which you wouldn’t get at uni. The workplace experience has been incredibly valuable, so if you’re interested in tech, I’d encourage you to go for an apprenticeship, explore every opportunity available and keep an open mind,” Hussain said.

Taken together, the three accounts point to a shift in the skills mix associated with junior technology roles. As AI tools become more common in workplaces, the apprentices said the ability to keep learning, work with users and adapt to changing systems is becoming as important as formal technical training.

All three also described apprenticeships as a practical answer to the experience barrier that can prevent candidates entering the sector. They framed the route as a way to gain income, training and exposure to real workplace problems at the same time, while opening paths into areas such as cybersecurity, data engineering and wider IT support.



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UK flight school collapsed into liquidation

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Liquidators have been instructed to wind down Go Fly Oxford, which provided lessons for commercial and private pilots licences.

Colin Wilson and Emma Mifsud, of Opus Restructuring & Insolvency, have been appointed as joint liquidators for Go Fly Oxford Ltd back in May 2025.

But new records filed by the liquidators have revealed an HMRC secondary preferential claim of £118,132.

Ten unsecured claims have been received by the liquidators totalling £60,314.

Further unsecured creditor claims estimated in the statement of affairs total £88,955, the published documents say.

(Image: Ed Nix)

Over the past year, liquidators say they investigated whether any recoveries could be made from directors or other parties, but concluded there were no further viable assets or claims.

Aircraft shown in the 2024 accounts at a book value of £238,181 had been sold before liquidation. The liquidators found the sales appeared to be at fair value and saw no basis for a claim over the transactions.

The aircraft sales happened about seven months before liquidation, outside the relevant period for a preference claim.

The aircraft were reportedly transferred to creditors and leased back so the company could continue trading.

A purchaser of a PA34-200 aircraft was said to owe £6,000. The liquidators received £4,980; the remaining £1,020 was treated as settled because the purchaser had paid a company liability instead.

Two employees were made redundant on 31 March 2025 and were given information to submit claims to the Redundancy Payments Service.

READ MORE: MOT centre and car shop collapses into administration

The flying school was based at Oxford Airport when it collapsed.

Its website, which has since been shut down, described the business: “At Go Fly Oxford we pride ourselves on offering a personal and tailored approach to pilot training.

“We know that people learn at different paces and in different ways, this makes catering for individual needs our main target.”

Oxford Airport’s main trade is pilot training. Flight schools at Oxford train pilots who go on to fly for more than 100 airlines in the UK and globally, including for British Airways.

Historically, the airport has been Europe’s foremost centre for professional pilot training with well over 40,000 students having started their careers there.

At one point, the airport’s runway was the busiest in the world with more than 235,000 movements a year (a take-off or landing) and up to 1,100 flights in a single day, its website says.

The business’ report says: “Over the course of 2025, the company will be complementing its Diamond DA40 fleet with a new fleet of Elixir aircraft, a safer and more efficient type of aircraft, which will provide a much reduced cost per flight hour.

“This, along with growth in enrolments and full utilisation of the European base will ensure the profitability of the business in the coming years.”





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