A new Virgin Media O2 report says 1 in 5 of the UK’s fastest-growing companies could leave the country within the next 3 years unless the government acts. The report found that while 85% of startups want to keep their base in Britain, 20% might relocate if conditions do not improve.
Among the main reasons are heavy regulations, talent shortages, political uncertainty and poor access to funding. Virgin Media O2 said £100 billion in value left London’s stock markets in 2024 as exits outpaced IPOs nearly five to one.
Two thirds of founders plan to increase investment this year, showing a desire to grow at home rather than abroad. But 68% view the US as a better place to scale a business, compared to 35% who said the same about the UK. Singapore and the EU also ranked higher.
What Are Startups Asking For?
Entrepreneurs have called on the government to create an environment that matches their ambition. Virgin Media O2’s roadmap lists five priorities: faster regulation, better access to capital, stronger digital networks, AI-ready skills, and a clear long-term plan for industry.
Businesses say the UK has the talent and ideas to thrive but needs systems that support growth. Daniel Kim, CFO of AI video company Synthesia, said the country “is home to one of the strongest startup ecosystems in the world, but barriers are holding too many innovators back from scaling into global success stories.”
He added that investing in digital infrastructure, unlocking late-stage funding, and modernising regulation could help the UK produce more home-grown unicorns.
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Can The UK Keep Its Edge In Innovation?
Almost half of the startups surveyed are still positive about Britain’s long-term outlook. Their outlook is influenced by the UK’s strong universities, stable legal system and global business ties that keep the optimism.
Conrad Ford, Chief Product and Strategy Officer at Allica Bank, said Britain’s environment for startups is among the best worldwide but added that gaps in regional infrastructure and regulation still limit growth.
The “Growth Signals: What the UK’s fastest-growing companies reveal about unlocking economic growth” report is based on insights from more than 2,000 high-growth firms, including leading AI and quantum startups.
Lutz Schüler, CEO of Virgin Media O2, said: “Bold and innovative businesses are created here in Britain because it cultivates home-grown talent with the ambition to match. But too many of the fastest growing companies can’t see a route to scale in the UK and are now looking to prosper abroad.
“With the country at an inflexion point, the time to act is now. Digital connectivity is vital to enabling innovation, and Virgin Media O2 is investing billions in next-generation networks, but that’s only part of the solution. We need agile regulation, patient capital, a strong talent pipeline, and long-term policy stability to unlock growth for the long term.
“With an AI powered economic revolution already underway, the question is now whether Britain leads or follows. Decline is not inevitable. This is a country that can maintain its place on the world economic stage and win if it fixes the frictions founders face every day.”
