Backing the UK’s most exceptional founders shaping – and harnessing – the AI revolution
The technology leaders of tomorrow are today’s founder-led start-ups applying cutting edge innovation to deliver real commercial value. For venture investors, the UK's unique innovation ecosystem makes it one of the most compelling places to find them.
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Artificial intelligence has rapidly become the defining theme in global venture investing.
AI businesses account for an increasing share of venture deal activity globally – specifically, more than 60% in 2025, according to OECD analysis of Preqin data (see chart below). Meanwhile a growing number of venture-backed and AI-related companies are achieving significant exits and attracting valuations that would have seemed extraordinary just a few years ago.
Sum of venture capital investment overall and for AI-related
Source: OECD.AI (2026), data from Preqin, last updated 2026-01-09, https://oecd.ai
Following a period of valuation reset, venture capital is recovering against a backdrop of improving market conditions, although fundraising, deal and exit activity remain selective and driven by a small number of large events.
Enthusiasm around the potential of AI, catalysed by the ripple effects of some of these very large deals, has also driven up valuations across the venture space. At all stages valuations are now ahead of their 2021 peaks, with this trend most pronounced in later stages and for AI-related investments.
AI concentration lifted VC valuations across every stage
Past perfomance is not a guide to future perfomance and may not be repeated. The views shared are those of Schroders Capital and may not be verified. Forecasts and estimates may not be realized. Source: PitchBook Data, Inc. As of 18 May 2026, PitchBook/NVCA Q1 2026 Venture Monitor, PitchBook Q1 2026 US PE Breakdown, Schroders Capital, 2026. Grey shaded areas show 2021 valuation range for the valuation stage.
In short, innovation has rarely been stronger in and around the AI revolution, yet capital remains concentrated around a relatively narrow set of opportunities – and is creating valuation pressures.
For disciplined investors, that combination creates significant opportunity to identify inefficiency. It also highlights the importance of being highly selective to uncover the best early-stage companies that will become the technology leaders – and venture ‘home runs’ – of tomorrow.
Spotting winners – and why founders hold the key
Successful venture investing has never been about backing a promising technology in and of itself. It has always begun with one question: who are the founders capable of building the next category-defining business?
This is the starting point; everything else follows. Exceptional founders create exceptional companies: they attract the best talent, develop unique products, build proprietary datasets, establish relationships and execute with speed. These characteristics create an enduring competitive advantage.
The very best entrepreneurs typically possess something else that is invaluable, but hard to quantify: a relentless determination to succeed. They challenge conventional thinking and execute with an intensity that is difficult to replicate. They identify meaningful problems before others do and build products that customers genuinely value.
Artificial intelligence does not change this dynamic. If anything, it reinforces it.
As foundation models improve, open-source development accelerates and AI capabilities become increasingly available through existing platforms, technological differentiation alone becomes harder to sustain. Competitive advantage increasingly shifts towards features that are harder to replicate.
At Schroders Capital we focus on businesses with the fundamental characteristics most likely to create durable value through multiple technology cycles. Those whose products are embedded within customers' day-to-day workflows, that possess proprietary datasets that improve products over time, and that are capable of continually adapting as customer behaviour evolves.
Importantly, as the underlying technology becomes easier to access, the people building businesses that harness it become even more critical. Put simply, founder quality is often the differentiator between companies that simply adopt AI and those capable of building enduring market leadership through it.
Why the UK stands out
Identifying exceptional start-up opportunities therefore requires understanding where the strongest founder ecosystems are emerging.
Innovation has become increasingly global, but relatively few locations consistently produce world-leading venture-backed businesses. The UK has quietly established itself as one of the most compelling.
Already Europe's largest venture capital market and the world's third largest, the UK combines many of the characteristics associated with Silicon Valley while retaining significant headroom for growth.
Venture investing and unicorn creation in the UK are growing
Source: HSBC Innovation Banking, Dealroom.co, Schroders Capital, 2026
The UK produces a remarkably high number of globally significant technology businesses – and ‘unicorn’ venture investments, valued at in excess of $1 billion – relative to the capital deployed into the ecosystem. Yet venture intensity remains materially below California's, suggesting considerable scope for further expansion as more institutional capital supports the next generation of founders.
For venture investors, this creates an attractive combination: a deep innovation ecosystem capable of consistently producing globally competitive companies, but within a market that remains less saturated than the world's leading US venture hub.
UK is home to Europe’s Silicon Valley - > Greater London
Quality density (talent, capital)
Source: Pitchbook, Dealroom.co, UK House of Commons Library, California State Portal, QS World University Rankings 2026, HSBC Innovation Banking, Crunchbase, Failory, Schroders Capital, 2026
Within the UK, London sits at the centre of a broader innovation corridor stretching through Oxford and Cambridge, bringing together globally recognised universities, internationally leading research institutions and one of the deepest pools of entrepreneurial talent outside the United States.
Combined with London's position as a global financial centre, this creates an ecosystem capable of supporting businesses from early-stage innovation through to global scale.
Increasingly, however, London's competitive advantage extends beyond research excellence, access to capital or technical talent. It is also beginning to benefit from what Accel describes as "founder factories": successful technology companies whose former employees go on to establish the next generation of high-growth businesses.
Silicon Valley has long benefited from this virtuous cycle. Companies such as PayPal built generations of entrepreneurs who went on to establish some of the biggest technology companies in the world. Accel's research highlights how companies including Revolut, Deliveroo, Spotify and Skype are now doing the same in Europe, and especially in the UK and London.
Founder-led businesses illustrating the opportunity
The characteristics that underpin our investment philosophy, and the potential of founder-led, innovative technology start-ups, are visible across a number of our UK innovation investment portfolio companies.
ElevenLabs
Few businesses better illustrate the importance of founder quality, and the supportive ecosystem in the UK, than ElevenLabs. Co-founder Mati Staniszewski moved from Poland to London before joining Palantir, where he met fellow Polish engineer Piotr Dąbkowski, formerly of Google.
The pair chose London for their European and worldwide operations headquarters due the city's vibrant cultural diversity, the scale of talent and a thriving AI ecosystem – including as the main European base for many of the US-headquartered global software and AI giants. They studied and started their careers there, meaning they had longstanding personal and professional roots in the capital.
The idea for the business emerged from an everyday frustration: watching poorly dubbed films and recognising that advances in AI made it possible to create far more natural, multilingual digital voices.
Rather than attempting to become another general-purpose AI-platform, the founders focused on one specific commercial problem well – creating natural, multilingual synthetic speech that businesses could deploy at speed. Now it is one of Europe's fastest-growing AI companies, demonstrating how disciplined execution can create more durable value than pursuing technological breadth alone.
TEM Energy
TEM Energy, founded by Joe McDonald, Jason Stocks, Bart Szostek and Ross MacKay, applies AI to optimise the buying and selling of power in today’s increasingly complex energy system.
Before establishing the business, the founding team played a leading role in building Limejump, the UK energy technology company acquired by Shell in 2019. That experience provided first-hand insight into the growing complexity of electricity markets and the opportunities created by increasingly decentralised energy systems.
In fact, the team are repeat entrepreneurs, which itself exemplifies the potential of London, and the UK, to provide the market infrastructure needed to grow and scale exciting start-up businesses.
As electricity demand rises, renewable generation expands and infrastructure becomes more decentralised, the ability to analyse operational data and improve system performance becomes valuable. TEM provides an AI-enabled platform for producers to sell energy directly at a higher margin, to businesses that are able to pay less than via conventional wholesale energy markets.
This is precisely the type of opportunity where founder quality becomes critical. Success in this market success depends on specialist knowledge and understanding of energy markets, customer needs and infrastructure economics.
Wayve
Wayve demonstrates how founder ambition can redefine an entire industry. Founded by Alex Kendall while completing his PhD in computer vision at the University of Cambridge, the business set out to tackle one of artificial intelligence's most demanding engineering challenges: autonomous driving.
Rather than pursuing the rule-based, map-heavy systems adopted by many competitors, Kendall believed autonomous vehicles should learn directly from real-world driving data using embodied AI. At the time, that represented a fundamentally different approach to the industry – and it was the vision that enabled Wayve to attract leading global investors and strategic partners, while remaining firmly rooted in the UK's research ecosystem.
More importantly, it illustrates a broader investment principle. Success in autonomous driving is unlikely to be determined by AI capability alone, but by the ability to build proprietary datasets, continuously improve model performance and execute over many years in an exceptionally demanding commercial environment.
Synthesia
Synthesia highlights the opportunity created when founders apply artificial intelligence to solve clearly defined commercial problems, rather than developing AI for its own sake.
Founders Victor Riparbelli, Steffen Tjerrild, Matthias Niessner and Lourdes Agapito recognised early that advances in generative AI could fundamentally change how organisations create and distribute video content. The company created a targeted, AI-enabled solution for business customers to produce professional-quality videos quickly and at scale, embedding AI directly into communications and marketing workflows.
By focusing on customer adoption, workflow integration and continual product development, Synthesia has built a business model that becomes more valuable as AI capabilities evolve.
Revolut
Founded by Nikolay Storonsky and Vlad Yatsenko, Revolut identified an opportunity to reimagine consumer financial services through technology. In the process it built a platform capable of continually expanding beyond its original proposition into payments, savings, investing and business banking.
Its success has been driven not simply by product innovation, but by relentless execution, rapid iteration and an ability to scale internationally – all while maintaining a technology-first operating model.
Perhaps even more importantly, Revolut has now become a founder factory in its own right. Former Revolut employees are increasingly establishing successful venture-backed businesses of their own, transferring operational expertise, international networks and entrepreneurial ambition into the next generation of technology companies.
The future belongs to founders
Artificial intelligence is likely to define the next decade of technology investing. But venture investing has never been about backing technology in isolation – it is about identifying exceptional founders capable of building resilient businesses before they become obvious.
As AI reshapes industries, that principle is unlikely to change. If anything, it becomes even more important.
As experienced venture investors, we believe the opportunity lies in identifying the founder-led businesses capable of turning technological disruption into enduring commercial advantage. The UK's increasingly mature innovation ecosystem continues to provide fertile ground in which to find them.
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