Experts Share: How Can UK AI Startups Stand Out In A Crowded Sector?

UK artificial intelligence companies attracted £2.9 billion in private investment last year, according to numbers from the Department for Science, Innovation and Technology showed this week… average deal sizes were at £5.9 million, which the government said was contributing towards its Plan for Change.

This increase means AI firms now contribute £11.8 billion to the UK economy, this is twice the amount reported in 2023. The workforce in the sector has grown to more than 86,000, spreading across regions far from London’s financial districts.

The data also showed change outside London with the number of AI companies in the Midlands, Yorkshire, Wales and the North West having doubled compared to 3 years ago.

 

What Does The Government Want?

 

Technology Secretary Peter Kyle addressed business leaders at Mansion House, urging them to match the government’s ambition. He spoke on new data centres, trimmed regulation and a drive to attract talent as examples of what had been done so far.

Rachel Reeves, the Chancellor of the Exchequer, said: “This government is slashing burdensome red tape and making the conditions for record investment in AI, so that once again the UK can lead the way.

“This country has huge potential, but our economy has been stuck on pause for too long. By giving companies the right environment to innovate, grow and create jobs we are changing that, delivering economic growth to put more money in working people’s pockets.”

Both ministers called on investors to keep backing British companies rather than looking elsewhere.

The government has also laid out measures to help regulators move faster in approving AI uses. This is meant to give companies more room to test and scale their ideas while keeping the UK competitive.

 

How Can UK AI Startups Stand Out?

 

Experts have shared ways AI startups in the UK can stand out, now that investment is rising. When investment goes up, inevitably the amount of AI startups will start to go up as well. But how are you making sure investors pick your startup instead of another? Here’s what experts advise…

 

Our Experts:

 

• Sarah Bone, Co-Founder, YEO Messaging
• David Weinstein, Founder and CEO, KayOS
• Roohi Bali, Director, Co-Founder at SCORR Ltd.
• Gor Gasparyan, Co-Founder and CEO, Passionate Design Agency
• Nikola Mrkšić, CEO and Co-Founder, PolyAI
• Glyn Powditch, Chief Technology Officer, Co-Founder, Dream Agility
• Ignacio Palomera, CEO and Co-Founder, Bondex
• Natalie Trice, Founder, Natalie Trice Publicity
• Tevin Tobun, Founder, ROUTD
• Harry Atkinson, Co-founder and Chief Customer Officer, Sensat
• Natalie Sutton, Tech Comms Board Advisor
• Laura Moss, Managing Partner, Parisi Consulting.
• Seb Brantigan, AI and Automation Expert, Co-founder and COO, DBSS Digital

 

Sarah Bone, Co-Founder, YEO Messaging

 

 

“There are estimated to be around 2500 AI startups operating in the UK in 2025. That’s a crowded market with 2000 launching in London alone. AI whitewashing is a real issue in this busy startup scene – too many companies are rushing to badge themselves as ‘AI-driven’ without being able to demonstrate meaningful AI that solves issues.

“Real UK AI startups, built from the ground up, can and will stand out by cutting through that noise and showing they are solving a genuine problem, not just applying AI as a buzzword. For investors and customers alike, differentiation comes from this clarity of purpose, responsible use of data, and proof of real-world outcomes. Startups that embed ethical AI principles into their foundations – transparency, accountability, and security – will have a far stronger chance of winning long-term customer and investor trust.

“The UK still has a unique opportunity and desire to lead the AI race by combining its world-class research with practical application. Those who focus on measurable business impact, not on spin for one or two AI or machine driven features, will be the ones that ultimately attract investment and build sustainable businesses.”

 

David Weinstein, Founder and CEO, KayOS

 

 

“Most companies are drowning in fragmentation with scattered data, tools, and teams. Despite numerous dashboards and reports, leaders lack a clear view of their operations. Shallow AI makes it worse by amplifying the noise without understanding context, creating a digital Tower of Babel where nothing speaks the same language.

“The truth is simple. The last mile of work isn’t solved by bigger models or better dashboards, it’s solved by translation. This is how intent becomes output without becoming diluted at every handoff.

“This missing layer is context. Context is the web of data, workflows and intent that defines how a company actually operates. This is the secret sauce of every company, yet most lose it to rigid tools and operational debt.

“The companies that stand out won’t be the ones chasing scale for its own sake, but those building adaptive operating layers where context compounds rather than collapses. That’s how UK startups can lead. They don’t need to compete on the models themselves, but rather by mastering translation and restoring context as the foundation for how organisations harness AI.”

 

Roohi Bali, Director, Co-Founder at SCORR Ltd.

 

 

“The UK AI Startups need a simple plan to be successful that includes purposeful innovation, sustainability, ethical governance, technical growth, and working with other people.

“We are focussing on making business models that are good for the Environment as CoFounders of an AI Sustainability Startup based in the UK. Our startup, SCORR and EcoChoiceHub, is an example of how AI and eco-friendly solutions can work together to assist consumers and businesses make greener choices.

“While working on AI startups, the end goal should be to consider environmentally sustainable. The plan should be supported by data-driven climate tech or solutions for a circular economy, and infrastructure that uses less energy.”

 

Gor Gasparyan, Co-Founder and CEO, Passionate Design Agency

 

 

“To become a successful AI Startup in an already crowded sector, AI firms in the UK need to stop generalist solution usage and to specialise. They can show both short-term value and scalability by addressing a specific issue in the industry, be it a healthcare issue, a financial issue, or supply chains.

“Investors, clients, and all types of people want to trust people, and, therefore, good governance, good data security, and good ethics are as significant as the technology itself. Such startups will elevate themselves above others through the incorporation of this comprehension of the region, in conjunction with transparency and quantifiable outcomes.”

 

Nikola Mrkšić, CEO and Co-Founder, PolyAI

 

 

“Too often, UK AI startups seem to be playing catch-up with their American or Chinese competitors. They can stand out by putting the fundamental user experience ahead of technology. When I was working on Siri to help make it feel more conversational, I saw how the best engineers obsessed over how things felt, not just how they worked. This helped shape PolyAI’s mission: to make conversational AI agents that help enterprises present the best versions of themselves to their customers.

“Similarly, to succeed in a crowded market, you need to build something people truly want to use, which could mean making tough technical tradeoffs that prioritize connection over efficiency, so people feel heard rather than “handled.” UK AI startups can differentiate themselves when they stay close to the user and never settle for “good enough.”

 

Glyn Powditch, Chief Technology Officer, Co-Founder, Dream Agility

 

 

“Dream Agility, an AI scale up that I co-founded with Elizabeth Clark was selected by Tech Nation as one of the UK’s top 29 AI Scale Ups from 140 applications back in 2019.

“We are now a Google Premier Partner ranked in the top 3% of agencies globally with our machine learning ad tech platform.

“We knew that what made us stand out remains the same even now. Firstly, you need a clear idea of how you will actually make revenues from your solution. It seems crazy to say, but I asked one of the other Technation cohort about their revenue plans, and they replied that they would be raising again shortly!
 

 
“That may have worked in 2019 when money was flowing freely but the market has definitely tightened and investors want to see how you will actually make money. Secondly, investors will want to see a solid set of cash flows. Whilst many investors will take the your numbers with a pinch of salt, especially with the usual hockey stick revenue curve that start-ups and scales ups are known for projecting, they still want to see that founders can navigate their finances, defend their basic assumptions have an actual plan in place, and know that they really believe in their offering.

“Finally, they need a compelling proposition with genuine differentiation from existing approaches and ideally good reasons why existing providers won’t suddenly copy their idea. Good examples could be paid pilot projects or even better, real revenue streams from paying clients who have shifted from conventional competitors or in-house teams.”

 

Ignacio Palomera, CEO and Co-Founder, Bondex

 

 

“Right now, every week another AI startup pops up and funding headlines make it feel like all you need is an LLM wrapper and a deck. That noise makes it harder for serious builders to get noticed. Our view at Bondex, after years of cutting through hype in Web3, is that the same rule applies here: credibility beats speculation.

“UK AI startups should double down on three things. First, show verifiable traction, not just lofty claims. Whether it’s enterprise pilots, user adoption, or validated benchmarks, data speaks louder than buzzwords. Second, lean into trust. AI is amplifying the noise problem online, so founders who can prove responsible use of data and transparent models will earn more durable reputations. And third, don’t ignore identity and community. People follow people, not faceless logos. If your founder team isn’t active in shaping the conversation, sharing insights, testing ideas publicly, you’ll blend into the background.

“In short: less hype, more proof. The UK has deep research talent and industry credibility; the startups that win will be the ones turning that into reputation-driven moats instead of chasing the next funding headline.”

 

Natalie Trice, Founder, Natalie Trice Publicity

 

 

“In a noisy, fast-moving sector like AI, it’s no longer enough to rely on social media or word-of-mouth to get noticed. UK startups need to think bigger and act smarter when it comes to visibility or they will fall through the cracks.

“Getting featured in the press isn’t about vanity metrics or chasing mentions for the sake of it. It’s about knowing who you want to reach and where they are already paying attention. Are your ideal investors reading trade publications, business pages, or tech columns? Then that’s where your story needs to show up.

“In a crowded marketplace, press coverage can build trust, position your founders as thought leaders, and attract serious conversations around funding, partnerships and product demand. If you’re not actively shaping your narrative, someone else will, or worse, no one will notice at all and everything you are working towards could stay on your desktop.

“Strategic PR in 2025 is not optional. It’s how you move from being another AI startup to a company with agency, influence and long-term legacy.”

 

Tevin Tobun, Founder, ROUTD

 

 

“To stand out in the increasingly crowded UK AI startup ecosystem, you have to be doing something distinct, differentiating through deep expertise, ethical AI practices, and compelling use cases that address real-world problems. Prove that you can provide one tangible solution to a market requirement, and demonstrate market demand and ROI in weeks, not quarters. If you can do that, then you’re not pitching potential, you’re demonstrating tangible impact will not only attract investor confidence but also establish lasting trust with users and stakeholders.”

 

Harry Atkinson, Co-founder and Chief Customer Officer, Sensat

 

 

“The market for general AI is crowded, yet few businesses are talking about real-world applications where the technology can deliver real value in a meaningful time frame. If startups want to stand out, they need to be discussing the problems they solve today, not in a general future in which AI is everywhere.

“We sell into the critical infrastructure and engineering markets, and they want tools that deliver real results in a specific application. The fact that AI powers our solutions is important, but it is secondary to delivering real customer value and impact.”

 

Natalie Sutton, Tech Comms Board Advisor

 

 

“Cut through the noise. UK AI startups need to ditch the buzzword bingo. Instead of saying you ‘leverage machine learning to optimise synergies,’ tell me exactly what you automate, how much time you save, and what that means in pounds and pence. Investors and customers are drowning in vague AI promises – specificity is your lifeline.

“Show strategic coherence: The AI startups that succeed aren’t just building clever algorithms, they’re building complete ecosystems. You need a cohesive strategy that spans your talent pipeline, governance frameworks, adoption roadmaps, and operational integration. If your AI strategy doesn’t touch every part of your business, you’re not thinking big enough.

“Prove value: Every AI startup claims they’ll ‘transform’ industries, but transformation without quantification is just expensive magic. Show me the 40% reduction in processing time, the £2M in cost savings, or the 15% boost in customer satisfaction. Business leaders don’t buy potential, they buy measurable outcomes.”

“Get clear on buyer readiness. Too many AI startups are solution-hunting for problems. The smartest ones flip this – they deeply understand their buyers’ readiness to change. Are you solving today’s urgent pain or tomorrow’s hypothetical challenge? Because buyers will only pay for solutions to problems keeping them awake tonight.

“Be transparent. Pricing opacity kills AI deals faster than technical limitations. Be upfront about data requirements, model constraints, and yes, what happens when your AI gets it wrong. Transparency isn’t just ethical; it’s competitive advantage in a sector built on black boxes.

“Address the barriers. UK AI startups often underestimate the human side of the equation. It’s not enough to build brilliant technology, you need to navigate procurement policies, regulatory concerns, and the very real fear that AI will make people redundant. Address the elephant in the boardroom, don’t ignore it.

“Tell stories with substance. Case studies aren’t marketing fluff, they’re proof of concept. But don’t just tell me what you built; tell me why it mattered. How did you train your models? Where do humans add irreplaceable value? What went wrong and how did you fix it? Vulnerability builds trust, and trust drives adoption.

“The AI gold rush has created a lot of fool’s gold. UK startups that combine technical excellence with commercial clarity, operational maturity, and genuine transparency – those are the ones turning investor interest into sustainable businesses.”

 

Laura Moss, Managing Partner, Parisi Consulting.

 

 

“In a crowded sector, it’s not enough to say you’ve developed something groundbreaking or life changing: you need a clear story. While technical details are important, jargon can create confusion. Companies need to focus on concise, simple, human language: the problem that your technology is solving, why your company’s approach is different, the unique people behind your brand, and why this technology matters in today’s world. Ultimately, that is what makes people remember you and, ultimately, what gets them all listening, whether this is media, government, investors or customers.

“The companies and the people that stand out (for the right reasons) are the ones that can explain their vision, mission and purpose in plain language; back it up with evidence and user cases, and adapt the messaging so that it lands with impact across different audiences. Get the messaging and story right, and it becomes a thread that runs through everything – from investor decks and media coverage to customer conversations and team culture.”

 

Seb Brantigan, AI and Automation Expert, Co-founder and COO, DBSS Digital

 

 

“As a startup, the odds used to be stacked against you when it comes to securing investment. Thankfully, with the fast and recent development of AI, the odds look slightly better. Even so, you’re competing in a sea of other AI startups.

“How can you stand out and claim your slice of the action? Here’s 3 ways you can:

1. Publish details of current or pending projects
“By doing so you’ll need to leave out any sensitive or personal details, but it shows a degree of transparency and that action is being taken. It’s also considered a green flag by investors as they can see what types of projects they’re currently investing in.”

2. Focus on your chosen area
“Review and seek industries and areas that need your help the most and are quickest to scale. Finance, health and public sector are good places to start – remember to factor in privacy laws such as GDPR and the storage of sensitive data. Start with one and don’t overwhelm. Less is more.”

3. Create a demonstration of power
“Put your money where your mouth is and give a demo of your service to a potential investor or client. If possible, do this in person. As much as you are running a virtual service, combining something online with a “real life” in person meetup can truly create some magic.”