The UK scaleup report 2026: Growth under pressure

The UK’s scaleup landscape is shrinking.

Amid a challenging economic environment marked by rising cost of living and ongoing geopolitical uncertainty, there has been a continuous decline in the number of scaleups over the last few years.

To determine whether the slowdown is a short-term reaction to current economic pressures or part of a wider shift, Vestd’s research team analysed Office for National Statistics (ONS) business population data to assess year-on-year changes in the scaleup ecosystem.

Topline summary

• Scaleup growth is stagnant: The number of scaleups in the UK has been continuing to fall since a peak of 129,080 in 2023.

• A decline across the UK: Only England experienced a small rise in scaleups over the past year, with Wales, Scotland, and Northern Ireland all experiencing a drop.

• London remains the UK’s scaleup capital, while regional hubs gain momentum: London has the highest concentration of scaleups in the UK and was the only region to see growth in 2025, while cities such as Manchester, Leeds, Winchester and Cambridge continue to demonstrate strong scaleup activity.

• Business insights: Advice for founders on navigating scaleup growth challenges, including how EMI share schemes can help attract talent and retain employees, which is vital for long-term expansion.

The UK’s current scaleup crisis

Scaleups are typically defined as companies with between 20 and 249 employees, representing businesses that have moved beyond early-stage growth and are actively scaling their operations, but have not yet reached enterprise size.

While the number of scaleups in the UK has grown by 6.32% since 2017, reaching 128,760 in 2025, the UK’s scaleup pipeline has effectively ground to a halt over the past few years.

In 2025 alone, there has been a 0.16% decline in the number of scaleups, continuing a downward trend since its peak in 2023, highlighting concerns that the UK’s ability to produce high-growth businesses may be weakening over time.

This challenge is also being felt by founders, with a 2026 survey finding that only 14% say the UK is an easy place to scale businesses.

While the number of businesses reaching scaleup status has yet to surpass its 2023 peak of 129,080, the total number of businesses operating in the UK has continued to grow in the same period, rising from 2,726,830 in 2023 to 2,734,620 in 2025.

This suggests the challenge lies in helping more businesses successfully transition into the scaleup stage.

The issue is becoming a growing concern, with a stark report by the House of Lords Science and Technology Committee stating the UK’s failure to scale up is causing the economy to “bleed to death”, with the committee’s chair, Robert Mair, warning that the long-standing issue has hit “crisis point”.

Scaleups play a significant role in the UK economy, generating a reported £2.19 trillion in annual economic contribution last year. Any continued decline in the number of businesses reaching scaleup status could have wider implications, putting future jobs and economic growth at risk.

A scaleup decline across the nations

Over the past year, three out of the four nations within the United Kingdom have experienced a decline in the number of scaleups, highlighting the widespread impact of the challenging economic environment on business growth across the UK.

• England remained the only nation to have a rise in scaleups over the last year, though it was a marginal growth of 0.01%.

• Wales had a 0.33% fall in 2025 and was the only nation to continuously see a decline in scaleups over the last eight years.

• Scotland saw a further decline of 0.85% in the last year, although Glasgow City had a 1.63% increase in the last year, retaining its status as the hotspot for Scottish scaleups.

• Northern Ireland had a greater fall than all three other nations combined, decreasing by 3.33% in 2025, despite seeing strong growth in 2024 at 2.32%.

A national overview of the number of scaleup businesses in the UK (2025-2023)