The figures suggest investors are becoming more selective and refining their focus with fewer but larger deals and more capital deployed overall, according to Mercia Ventures.

The figures compiled by Beauhurst show there were 352 deals in Scotland in 2025, up 0.86% on the previous year, while total equity investment increased by 31.5% to £1.11bn. In the UK as a whole, the number of equity investments fell by 8% to 5,887, while total investment rose to £24bn (up 3.43%).

The report also reveals that first-time equity investment in the UK as a whole rebounded sharply in 2025 after several years of decline and while fewer businesses received follow-on capital in 2025, those that did secured higher amounts.

Artificial Intelligence (AI) companies accounted for almost a third (32%) of the total funds raised, while robotics, cloud computing and tech consulting all outperformed their three-year averages in terms of both deal volume and values. However, there was a sustained decline in funding for the life sciences sector, with fewer deals and at lower values than in recent years.

Will Clark, managing director of Mercia Ventures, said: “These figures show the equity market is not retreating so much as refining its focus, and that founders remain firmly at the centre of that recalibration. Investors are placing a clearer emphasis on strong fundamentals, truly differentiated technology and backing teams with the resilience to build through the noise.

“The rise in first-time deals suggests a pipeline of new companies entering the equity market, driven in part by the urgency of investing in new sectors. New founders are reaching investable scale faster, while investors are prepared to commit increased support earlier when the opportunity warrants it.

“For investors and founders alike, this is not a market defined by retreat, but by selection. The figures signal confidence not only in the market as a whole, but in the quality, ambition, and ingenuity of the founders capable of raising capital in this environment.”