UK Business Registrations and Equity Investment Surge in Q3 2025
The third quarter of 2025 recorded a notable uptick in new business registrations across the United Kingdom, with Scotland ranking second only to London in regional investment activity.
According to newly released data from Barclays, based on research by Barclays Eagle Labs and Beauhurst, the number of active companies in the UK reached 5.48 million by the end of Q3 2025 – an increase of 0.43% compared with the previous quarter.
At the same time, UK equity investment rose sharply by 78.4%, reaching £5.89 billion, driven primarily by growth in the Digital, Professional and Business Services, and Financial Services sectors.
Broad-Based Growth Across the UK
Most UK regions experienced an increase in active companies during the quarter. The North East saw the largest rise, with a 1.03% increase – equivalent to around 5,500 new firms. Only Scotland and the East Midlands reported slight declines in incorporations, despite Scotland’s strong performance in investment terms.
The data suggests that regional business activity continues to diversify, with smaller regions showing resilience and adaptability despite a challenging macroeconomic environment.
The Role of the UK Government’s Modern Industrial Strategy
The UK Government’s Modern Industrial Strategy, launched in July 2025, has played an influential role in shaping investment flows. The strategy identifies eight priority areas – collectively known as the Industrial Strategy Eight (IS8) – aimed at enhancing national productivity and innovation. These sectors include Advanced Manufacturing, Clean Energy, Creative Industries, Digital and Technologies, Financial Services, Life Sciences, Professional and Business Services, and Defence.
Nearly one-fifth (19.2%) of UK companies now operate within these IS8 sectors. Together, they attracted £3.90 billion in equity investment during the third quarter, representing 47.7% of all UK equity activity. The Digital and Technology segment led the way, securing £2.37 billion, followed by Professional and Business Services (£1.24 billion) and Financial Services (£986 million).
Abdul Qureshi, Managing Director of Business Banking at Barclays, noted that the IS8 framework has provided clear direction for investment. “The government has set out a clear vision by identifying the IS8 sectors as priorities for UK growth,” Qureshi said. “While a significant share of companies now operate in these areas, sustained growth and investment continue across other sectors as well.”
Peter Kyle, Secretary of State for Business and Trade, emphasized the partnership between government and industry, stating that the data demonstrates the country’s appeal as a global investment destination. He described the Modern Industrial Strategy as key to “driving economic growth into every part of the country, creating jobs and new opportunities” and offering investors long-term confidence.
Sharp Rise in Equity Investment
The Barclays Regional Investment Map – a quarterly report produced by Barclays Eagle Labs and Beauhurst – highlights the rebound in UK equity activity following a quieter first half of the year. Total investment rose 78.4%, suggesting renewed investor confidence across several high-growth industries.
The Digital and Technology sector remained the primary driver, responsible for £2.37 billion of total investment through 628 deals, with almost half occurring at the seed stage. This indicates continued appetite for early-stage innovation, especially within software, AI, and data-led businesses.
Although smaller in absolute company numbers, Advanced Manufacturing recorded the highest average funding per company, buoyed by two large transactions in automotive and manufacturing technology.
The Defence sector also saw sustained attention from investors, particularly in regions with strong manufacturing and technology capabilities. Notable defence-related equity activity was observed in London (£65 million), the West Midlands (£35 million), and the South East (£4.3 million).
Scotland’s Standout Performance
Scotland emerged as one of the most dyn amic investment destinations of Q3 2025, with equity investment increasing 675% to £507 million. This surge was largely attributed to a major funding round by Fidra Energy, which raised £445 million to finance the Thorpe Marsh Battery Energy Storage System, a project designed to enhance the UK’s renewable energy infrastructure.
The country also led the UK in Clean Energy investment, securing £450 million – substantially ahead of London (£121 million). This level of funding reinforces Scotland’s growing influence in the national energy transition and its ability to attract large-scale private capital for sustainable initiatives.
Beyond energy, Scotland continues to strengthen its reputation as a hub for academic and research-driven innovation. Outside the so-called “Golden Triangle” of Cambridge, London, and Oxford, Scotland now hosts the largest number of university spinouts, recording 339 in Q3 2025.
Commenting on these trends, Qureshi highlighted that the rising levels of equity investment – particularly in Digital, Professional Services, and Clean Energy – underscore the UK’s appeal to both domestic and international investors. He added that Scotland’s performance demonstrates “the importance of growth across all pockets of the UK in driving national progress.”
Outlook
The increase in new incorporations and the strong rebound in equity investment reflect a gradually improving business environment heading into late 2025. With a broad base of sectors contributing to growth and a clear policy focus on innovation, sustainability, and advanced technologies, the UK appears to be entering a phase of renewed entrepreneurial momentum.
While regional disparities persist, the overall trajectory suggests increasing investor confidence and a more geographically balanced pattern of economic activity. As the Modern Industrial Strategy continues to mature, analysts expect further capital inflows into the IS8 sectors – particularly in Clean Energy and Advanced Manufacturing – throughout 2026.