The Startup Coalition’s new AI Index – what can we see through the financial services lens?

Useful benchmarks are still few and far between, but a new one has just hit the scene, and it gives some useful insights both into the UK's positioning globally and into what is going on in the UK as between the regions and as between economic sectors.

The Startup Coalition's inaugural index (the Index) gives a snapshot based on its profiling of the UK's “top 1,000 AI startups” based on the “amount of private capital they have raised." These companies span 16 sectors of the UK's economy, including manufacturing, agriculture, defence, energy and food.

The headlines are:

• Financial services is one of the UK's top three economic sub-sectors;
• London is currently leading the UK's AI race;
• The UK's strength appears to exist in the application layer, in embedding AI into workflows, products and services, and into real-world commercial problem-solving situations; and
• More is needed in terms of spending (private funding is currently the major (98%) source of funds), of public endorsement which celebrates the UK's AI talent ("endorsement helps with customers, investors, and talent acquisition"), and speed: “AI Growth Labs need to come online in 2026, not 2027 or even later”.

The Index speaks to more than numbers: 

Significantly, it provides insights into the UK's economic sectors, the emergence of geographic clusters and strongholds, the experiences of AI founders, and the need for strategic and impactful policy intervention. The Index notes that the UK currently ranks “third globally for AI investment and talent concentration" reflecting “deep scientific expertise, world-leading universities, an entrepreneurial culture, and a VC ecosystem that understands how to back high-growth technology companies” and reveals a ”maturing ecosystem: university spinouts, accelerator graduates, and an increasing number of firms progressing through funding rounds to build substantial, scaled businesses". The Index also cautions that to retain its positioning as one of the global leaders in AI, the UK needs to build on its strengths, leverage its position, and “create an environment where fast-moving companies can access talent, data, compute, and customers at speed.”

The UK's top economic sectors:

Financial services sit alongside business services and health as a dominant UK economic sector in the UK's AI ecosystem. The Index states that this leadership reflects “a convergence of structural advantages, market demand, and the UK's existing industrial strengths.” 

Business services, representing software and professional services, including legal, accounting and management consultancy firms, is the all-out leading sector not only in terms of the number of firms, jobs created, and funds raised, but also in terms of its presence in every UK region, notably: “While London dominates with 264 firms, the South East, East of England, and South West each host meaningful clusters.”

Financial services, given the importance of London as a “global financial capital”, is more focused on London. The Index suggests that “Financial Services AI startups are tackling capital-intensive problems or reaching scale quickly, likely due to the high-value nature of financial services contracts and the willingness of incumbent institutions to pay for proven solutions” and gives a shout-out to the FCA for supercharging the AI revolution with its supercharged sandbox which “allows firms to innovate and experiment with AI, providing everything from technical expertise to physical infrastructure as well as a permissive system that allows testing.”

Frictions:

The need for more public endorsement and showcasing of the UK's top AI companies has already been drawn out as one of the opportunities that the UK needs to make more of. Other key challenges are noted as:

• risk aversion;
• access to funding;
• lack of domestic market scale;
• international competition;
• talent access;
• regulatory complexity; and
• global headwinds.

The Index makes it clear that the UK will need to foster and encourage international collaboration and investment in order to survive inevitable disruptions to the AI stack sitting beneath the application layer, which the UK does not own and cannot control: “….The application layer, while valuable, operates at the pleasure of the lower layers.” 

Regions:

Behind the leader position occupied by London, the South East comes a close second ("buoyed by the Oxford Innovation Corridor and proximity to London") followed by the East of England ("driven largely by the Cambridge cluster"). Notably, for spinouts, “most commonly a new organisation, or company, formed out of a university, commercialising research or technology that has come out of the institution” the South West follows in fourth place, just ahead of the North West. The Index celebrates the spinout as a feature of the UK's academic and economic ecosystems noting that almost one in ten of the startups it features are spinouts. 

Conclusions:

The Index ends with a series of recommendations that draw on the UK's opportunities, the imperative that it supports scale-up, and develops a global edge. Some of the key take-away points include:

• Create more spinouts: encouraging the creation of entrepreneurs, and the commercialisation of work that starts in the UK's excellent universities;
• Support the regions: feeding investment into deals in the regions where the UK can develop its competitive advantages, both in known growth zones and in new and developing regional clusters; and
• Back the unicorns: empower fast-growing companies with compute, credibility, access to the right talent and with cash-flow (including sympathetic tax treatment and with revenue), so that they can expand in, and then wish to remain in the UK, while celebrating the success stories “loudly enough for the world to hear”.

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If you would like to discuss how current or future regulations impact what you do with AI, please contact me, Tom Whittaker, or Martin Cook. You can meet our financial services experts here and our AI experts here.

We’ve spent months crunching data, surveying founders, and speaking to founders. Today, Startup Coalition is publishing its inaugural AI Index - the first comprehensive profile of the UK’s top 1,000 AI startups and scaleups by raise. The headline numbers are substantial. These 1,000 firms have collectively raised £20.2 billion, command valuations exceeding £45 billion, and in 2025 employed more than 35,000 people. What the Index Tells Us The UK’s strength is in application. The top three sub-sectors for companies in the AI index to be operating in include: business services, followed by financial services and health. The Index shows companies embedding AI into workflows, products, and services across the economy. This matches what the founders told us: the UK can win at the application layer.

https://startupcoalition.substack.com/p/introducing-the-startup-coalition