British startups have never existed in a vacuum — but in the last decade, international investment has become more than just a capital source. It’s a shaping force. Who funds you is increasingly linked to how you operate, where you expand, and even what you stand for.
The numbers are clear. In 2023, more than 60% of all venture capital raised by UK startups came from overseas investors, according to Dealroom. US venture firms led the charge, but significant activity also came from the Middle East, Singapore, and even South Korea. London, already Europe’s fintech capital, now sees term sheets arrive from San Francisco, Dubai and Singapore in the same week.
This cross-border capital is accelerating growth — but not without complications.
In January 2023, Manchester-based logistics startup Beacon announced a £50 million Series B round, led by Northzone and Redpoint Ventures, two firms headquartered in the US and Sweden respectively. Beacon used the funds to scale into the Benelux and Nordics, where both investors already had networks.
That network access proved more valuable than the cash itself. Beacon’s CEO, who had previously struggled with navigating regulatory frameworks in the EU, said in an interview with TechCrunch that the backing gave him “a front door into Europe” — something he couldn’t have achieved as fast with UK-based money alone.
But international investment is not always this frictionless.
Cultural expectations can vary. When Abu Dhabi Growth Fund invested in a Birmingham-based AI startup in 2022, they requested an observer seat on the board and quarterly strategy meetings in the Gulf. The founder, speaking off the record at London Tech Week, admitted the increased oversight “caught us off guard.”
There are also ethical considerations. In 2021, a wave of criticism hit British healthtech startup Babylon Health after it was revealed that a portion of its Series D funding came from the Saudi Public Investment Fund. Critics questioned the alignment of values between a startup promising patient-centred digital care and a government-linked fund with a mixed human rights record. Babylon didn’t violate any rules — but it learned the hard way that capital is rarely neutral.
International money can also distort valuations. In the years leading up to 2022, several US investors offered UK startups Silicon Valley-style valuations — generous but based on expectations of hypergrowth. When economic conditions changed and interest rates rose, those same investors pulled back. Startups left with inflated valuations and a high burn rate found themselves unable to raise follow-on rounds.
London-based Thought Machine, a cloud banking firm, avoided that fate. Despite interest from US and Chinese funds, it chose to lead its £160 million Series D with UK-based Temasek and backed that with strategic partners like Intesa Sanpaolo and Morgan Stanley. CEO Paul Taylor noted publicly that they were “optimising for long-term fit, not flash valuation.”
So what does this mean for British founders in 2025?
It means foreign capital is still on the table — but the calculus is more nuanced. You’re not just choosing a cheque. You’re choosing influence. Expansion routes. Governance pressure. Even reputational alignment.
None of that is necessarily bad. But it means founders need to stop treating international funding as free money. It’s a partnership — and one that’s increasingly public.
The best founders now aren’t just raising. They’re curating. And in an environment where capital comes with strings, the ones who ask the harder questions up front are the ones who’ll stay in control later on.
At the heart of the collaboration between Australia and Britain lies a transformative Memorandum of Understanding (MOU), a document that not only signifies a strategic alliance but also draws upon the insights provided by a paper titled “The Landscape of the Quantum Start-up Ecosystem.” This work, by Zeki Can Seskir, Ramis Korkmaz, and Arsev Umur Aydinoglu, published in October 2022, stands as a guiding beacon for the collaborative efforts envisioned by Australian Industry and Science Minister Ed Husic and British Secretary of State for Science, Innovation, and Technology, Michelle Donelan.
The paper offers a comprehensive landscaping study that delves into the intricate dynamics of the global quantum start-up landscape. With a robust dataset encompassing 441 companies hailing from 42 countries, the authors illuminate the temporal and geographical distributions, categorisations, and evolving trends within the quantum start-up ecosystem. As the ink dries on the MOU, the integration of insights from their research becomes a cornerstone of the collaborative framework.
Essentially, the MOU transcends a mere agreement; it becomes a fusion of strategic intent and wisdom. The collaborative efforts between Australia and Britain gain depth and direction. The MOU, informed by the paper’s findings, propels both nations into a future where quantum technologies are not just explored theoretically but are translated into practical applications, fostering meaningful global advancements.
The MOU not only underscores the commitment to joint efforts but also seeks to leverage existing bilateral and multilateral science and technology cooperation frameworks. According to the paper’s findings, more than 92% of quantum start-ups have been founded within the last decade. The temporal and geographical distributions resonate with the collaborative vision of Australia and Britain, two nations at the forefront of the quantum revolution.
Australia’s quantum prowess is an example from the paper due to its global leadership in quantum technologies. The nation is home to several leading quantum startups, including Q-CTRL, Diraq, and Quantum Brilliance. Accordingly, these companies exemplify Australia’s dedication to commercialising quantum advancements. The recent backing of Queensland’s first quantum hardware startup further solidifies Australia’s commitment to quantum innovation.
As Australia and Britain join forces in the quantum revolution, the collaboration gains additional depth with insights from the study. The MOU’s principles now not only reflect a commitment to exploring the theoretical aspects of quantum technologies but also align with the categorised fields presented in the paper.
By leveraging existing frameworks and aligning with strategic initiatives, this collaboration seeks to propel quantum research and development on a global scale. Australia’s quantum prowess, coupled with Britain’s technological leadership, promises a future where the quantum frontier becomes a shared landscape of innovation, discovery, and progress.