Market insight: What we’re seeing in the UK’s social tech landscape right now

UK’s social tech ecosystem is stronger than ever — now worth oThe ver $1T — but early-stage founders remain overlooked, and Social Tech Ventures is here to close that gap. 

We are launching Social Tech Ventures at a time of rapid change and enormous potential for social tech in the UK. Capital markets are evolving, public interest in social and environmental impact is growing, and founders are building mission-driven ventures with increasing ambition. 

The opportunity is clear. So is the challenge. 

Here’s what we’re seeing across the market, and why we believe now is the moment to back a new generation of social tech entrepreneurs. 

A fast-growing, maturing ecosystem 

The UK continues to hold its place as one of the world’s leading startup ecosystems. Now valued at over $1 trillion, it ranks as the third most valuable globally and remains Europe’s top destination for venture capital. With more than 25,000 funded startups and over 150 unicorns, the UK consistently attracts global investment and talent, reaffirming its position as the world’s third-largest VC hub (Dealroom, 2025). 

Impact tech is at the heart of this growth. The UK is now a global leader in impact innovation, with London ranked as the number one city in the world for impact tech funding in 2020 (UKTN, 2020). Today, 15% of all VC investment in the UK is directed toward impact-focused ventures — a sign of the sector’s maturity and momentum. London’s position as a global hub has only deepened: in 2024, it was named the best city in the world to create, develop and deploy technology for the second year, with Oxford and Cambridge also joining the global top five (Smart Centres Index, 2024). 

According to Big Society Capital’s 2023 market sizing report, the UK’s social impact investment market grew 7% last year to reach £10 billion. The sector has shown resilience despite economic uncertainty, with capital continuing to flow into areas such as social and affordable housing, lending to charities and social enterprises, impact venture, and social outcomes contracts. 

This is not a niche sector. It’s a core part of the UK’s innovation economy and one that is only gaining relevance in a world shaped by climate change, public health pressures, and social inequality. 

Founders are building, but early-stage capital is still missing 

While more capital is entering the impact investment space, early-stage ventures, particularly those at seed and pre-seed stage, still struggle to access the funding they need to grow. This gap is especially stark for founders building mission-led businesses and for those from underrepresented backgrounds. Many of these ventures fall outside traditional venture capital expectations, whether because of their business models, the communities they serve, or the time it takes to deliver meaningful outcomes. 

We’ve seen this firsthand through our work with over 450 ventures at Social Tech Trust. Even founders with strong traction and clear social value often find themselves without aligned capital at the moment they need it most. Many go on to raise follow-on funding once they have proven themselves, but too often, promising companies are left unfunded during the most critical early stages. 

Much of this stems from misalignment. Traditional venture models are typically built around hyper-growth trajectories and short-term financial returns. These models rarely account for the complexity, risk profile, or timeframes involved in building socially impactful technology. As a result, ventures with strong missions and alternative growth paths are often overlooked, not because they lack potential, but because they do not fit the standard template. 

Social Tech Ventures is here to change that. We are addressing the missing middle in the investment landscape, bridging the space between impact ambition and capital availability with a fund that is flexible, founder-centred and aligned with long-term outcomes. 

A policy environment that supports innovation 

The UK government has made science, technology and innovation central to its national strategy. The Science and Technology Framework commits to positioning the UK as a global tech superpower by 2030. The 2023 Mansion House reforms were designed to unlock pension capital for venture investment, aiming to channel billions into high-growth UK companies by 2030 (HM Treasury, 2023). Building on this momentum, the Leeds Reforms announced in July 2025 represent the next step, rewiring the financial system to boost investment, drive innovation, and create skilled jobs across the UK (HM Treasury, 2025). 

This momentum matters. It means that both public and private actors are seeking ways to support inclusive innovation, particularly in sectors such as health, climate, and financial inclusion. 

It also means more demand for capital allocators who understand the impact space and can deploy early-stage investment with strong governance, equity-led frameworks, and a clear path to outcomes. 

AI, energy and fintech are leading the way

The UK tech sector reached a combined market valuation of $1.1 trillion in Q1 2024, securing its position as Europe’s number one ecosystem (Tech Nation, 2024). In 2023, UK startups raised $21.3 billion, led by energy ($5B), fintech ($3.9B), and transport ($3.7B).  

AI is a rapidly accelerating force across these sectors: 16% of all UK VC investment in Q1 2024 went into AI startups, with more than 1,800 AI ventures now backed by VCs, including 20 unicorns. With 69% of UK tech professionals reporting AI already has a positive impact on their work, AI is fast becoming the connective tissue powering the UK’s mission-led innovation. 

Why now and why Social tech ventures

We’re not starting from scratch. STV builds on more than a decade of experience working with early-stage impact ventures through our foundation, Social Tech Trust.  

We’ve seen what’s possible when the right funding meets the right ambition. We’ve also seen how many great ideas stall simply because there isn’t a funder willing to back them at the earliest stage. 

We believe this is the moment for a new kind of capital: flexible, equity-led, and aligned with the people building the solutions. The market is ready. Founders are building. Demand for social innovation is only growing. And we’re here to meet that moment.