The United Kingdom stands at a critical crossroads in its technology landscape, facing what industry leaders are calling the 'Great British Exit Crisis'. While Britain continues to produce world-class startups and attract billions in investment, an alarming trend sees these homegrown successes being snapped up by American giants rather than developing into British tech champions.
The Scale of the Problem
Recent data reveals the shocking extent of this brain drain. When analysing the top 50 UK exits from 2024-25, researchers found that 94% occurred through acquisitions, with almost all buyers coming from American technology firms. Even more concerning, only 30% of acquiring companies were headquartered in the United Kingdom.
Carolyn Dawson, CEO of Founders Forum Group, highlights the paradox: 'Britain has no lack of ideas, founders or ambition. More than 100 companies are incorporated every hour in this country, and British start-ups have raised more than $7bn in investment so far this year alone.'
The UK has certainly produced remarkable success stories. Oxford Ionics, the quantum computing firm, was acquired for over $1bn earlier this year, while Verona Pharma, the healthtech company revolutionising respiratory treatment, fetched an extraordinary $10bn this summer.
Why British Founders Look Abroad
The root causes of this exodus are becoming increasingly clear. Many founders report that the path to IPO in the UK is too narrow, too slow and too shallow on liquidity. Private capital often dries up just when companies need it most, forcing them to either sell early or seek deeper funding pools abroad.
This creates a vicious cycle where British entrepreneurs build extraordinarily successful businesses, only to sell the gains - and future potential - to American giants. The nation misses out on job-creators that could support future generations, loses the opportunity to shape defining technologies of the next decade, and forfeits tax receipts from multinational tech firms that could be headquartered in London.
Learning from European Neighbours
The situation isn't inevitable, as European markets demonstrate. France's Euronext Paris has seen record listings in energy and biotech, supported by strong retail participation and state-backed capital. Sweden, with a fraction of Britain's population, continues to punch far above its weight in public listings.
These markets didn't achieve success by accident - they built ecosystems of domestic investors, from pension funds to individual savers, who believe in backing homegrown scale-ups for the long term.
By contrast, British pension funds now invest less than one per cent of their assets in UK equities, compared to nearly 20 per cent in the 1990s. This represents a dramatic shift in investment priorities that has left UK startups scrambling for capital.
The Path to Recovery
Reforms like the Mansion House Accord, which aims to invest five per cent of direct contribution pension funds into unlisted start-ups, represent steps in the right direction. However, experts argue we need to move further and faster.
More than 50 leading UK founders have recently called on the government to create dedicated mechanisms within the Isa system to encourage investment in UK innovation funds. Additional measures could include changing how firms are required to talk about risk to encourage individual investors, and shifting pension funds away from their current risk-averse stance.
Exit should mark the beginning of the story, not the end - turning promising firms from startups into homegrown heavyweights that keep talent, innovation and economic gains within Britain. Achieving this would create a virtuous circle: more British giants that can acquire more British start-ups, driving further innovation and resulting in genuine Great British Exits rather than lost departures.
What Britain ultimately lacks isn't ideas, founders or ambition, but the capital and confidence to keep our best success stories at home. As Dawson concludes: 'Britain is a fantastic start-up factory, and America the biggest buyer. We need to bring back the Great British Exit, so more tech successes start and end at home.'
