Britain’s music tech sector is facing a scaling crisis, with funding for growth-stage firms collapsing by 90 per cent over the last five years despite the rapid rise of AI and growing investor interest in music licensing infrastructure.
A new report from industry body Music Technology UK (MTUK) found investment into growth-stage music tech companies plunged from £101m in 2020 to just £10m in 2025, raising concerns that promising British firms are being forced overseas before reaching meaningful scale.
The findings come as policymakers and investors grapple with Britain’s well-documented struggles turning highly effective startups into global leaders.
Between 2020 and 2025, UK music tech firms attracted more than £809m of investment, according to the report, which analysed 922 companies alongside research partner Beauhurst.
Funding peaked at £183m in 2021 but fell to £68.8m last year, representing a 51 per cent decline.
While seed-stage investment more than doubled during the period, rising from £8.4m to £22.1m, larger growth rounds all but disappeared.
The results led MTUK to warn of a widening funding gap for companies that have already built products and customers but need capital to expand internationally.
“When we published the first Sound Investments report last year, we argued that UK Music Tech was undervalued, underinvested, and underrepresented” said MTUK chief executive Matt Cartmell.
“A year on, that is changing – but not fast enough.” Many companies are....
