New research into the UK life sciences landscape has revealed a growing trend of investment into more mature companies.  

Pioneer Group’s ‘Life Science Start Up Report’ also highlights a persistent regional imbalance, with ‘Golden Triangle’ university spinouts attracting significantly more funding than those elsewhere. 

Whilst the number of deals in 2024 decreased slightly compared to previous years, the average deal size increased, with life science companies raising £3.54 ($4.5) billion across 595 deals in 2024 – up from the £2.91 ($3.7) billion raised via 656 deals in 2023.  

Crucially, average deal size rebounded to £6.19 ($8.3) million, the second-highest figure over the decade after the 2021 spike of £6.83 ($9.1) million. 

Venture-stage life science companies saw a significant rise in their share of deal value, from just 12.7% in 2022 to 44.4% in 2024, alongside a corresponding increase in deal volume, pointing to an increased investor focus on more mature life science businesses. 

Pioneer Executive Director Dr Glenn Crocker MBE said: “Start-ups formed in the period of 2005 to 2009 raised a total of £372m in those years, while companies formed in the 2020 to 2024 bracket raised just under £3bn – eight times as much. Whilst the environment for early-stage life science companies is certainly tough, we should also acknowledge and celebrate just how far the industry has come on the back of the hard work and risk-taking of many key players in the sector.” 

Life sciences North/South divide

The report highlights the continued concentration of life science start-ups and university spinouts in the south of the UK, particularly in London, the South East, and the East of England – collectively known as the ‘Golden Triangle.’  

Universities in Oxford, Cambridge and London generated the highest number of spinouts and attracted the largest share of equity investment. 

Emerging clusters in cities like Manchester, Glasgow and Belfast received significantly less capital and support, despite their research strength. 

“Regional variation is especially clear in the spinout population, where a small number of institutions account for a large share of the life science company population,” Glenn Crocker explained. “Whilst it does not always follow that a well-funded company is going to be more successful, it is reasonable to assume that a poorly funded business will usually struggle or develop more slowly.”

Diana Turner, Senior Digital Content Editor, DDW