In 2024, life sciences was the only tech sector analysed where the UK had not improved its global share of venture capital (VC) funding in a decade, said Carmine Circelli, the director of life sciences direct and co-investments at British Business Bank.

The UK life sciences industry has “lots of ground to make up,” Cirelli said at the BioTrinity 2025 conference, held in London from 1 to 2 April. He described a growing gap between the British healthcare space and other global markets.

He attributed the lack of movement to negative market sentiment, saying: “There is an impression that the sector is risky and that the returns are not as great as you find in other sectors.” He added that the reliance on long-term investment can also trigger reluctance from investors.

The UK does not have enough active fund managers to ensure enough financing for UK life sciences companies, Circelli concluded. Furthermore, a 2024 British Business Bank survey found that 69% of 42 VC fund managers saw the conditions for raising a new fund as “poor or very poor”.

Adding to the conversation, Mark Andrews, the director of the life sciences fund at the British Business Bank, said further government support is necessary to bolster the UK VC space. The British Business Bank is a company established by the government that strives to support small and medium businesses by offering business advice services and providing opportunities for financing.

Andrews highlighted work done by the British Business Bank’s Life Sciences Investment Programme, a £200m scheme “to address the growth equity finance gap faced by high-potential UK life sciences companies”, as per the organisation’s website. The initiative aims to garner at least £400m in additional private financing to increase growth in the UK life sciences sector. The British Business Bank previously started the £425m “Future Fund: Breakthrough” programme, in April 2021, for life sciences and deep tech companies focusing on R&D. Through this programme, the government organisation invests in businesses, alongside companies in financing rounds above £20m.

Pairing public investment with private investment in this way can be very attractive for VC entities to reduce risk in their investments, says Andrews.

The UK’s Office for National Statistics (ONS) reports that equity finance raised by the UK fell by 14% from 2022 to 2024, as per a July 2024 report. However, the BioIndustry Association (BIA) reported earlier this year that the UK biotech sector fundraised £3.5bn in 2024, demonstrating a 94% improvement compared to 2023. The trade organisation’s annual financing report found that VC financing comprised £2.06bn of the country’s total, a 64.8% increase since the last year, signalling a potential upturn in the industry.