Beyond Silicon Valley: Five UK Deep Tech Startups to Watch in 2026

Five UK deep tech companies redefining the future of AI, quantum computing, and robotics, proving Britain’s innovation ecosystem deserves global attention.

Tech trends come and go, but the idea of innovating and developing your own company remains a popular choice for many individuals. Startup locuses exist around the world but much of the focus is on the United States, and particularly Silicon Valley.

New companies established on the west coast tend to grab the attention, in part because of their proximity to the big tech firms that dominate our lives. But there’s a whole world of innovation out there, and startups cropping up in every corner of our planet.

One overlooked home of startups is the UK, where companies often establish themselves – even if a lack of opportunities and sometimes stringent tax regimes or abilities to list companies publicly means that they end up moving elsewhere at the point of launching an IPO. There were some 15,000 tech startups registered in the country in the second quarter of 2025, according to Companies House data.

London punches above its weight, ranking third in the Global Startup Ecosystem Report published by Startup Genome, behind only the two American coastal titans of New York City and Silicon Valley. While that’s scored on a range of different measures, the objective data tells its own story: the UK is ranked fourth for the number of unicorns it produces, with 53 in total as of 2024.

The UK overindexes on AI startups, coming second only to the Sweden according to Dealroom and Worldometer analysis when it comes to the number of such companies per 100,000 people. It all adds up to a thriving space that can often be overlooked – wrongly – and ought to be recognised for what it offers.

With that in mind, here are five companies doing something special in their respective spaces that we think could be ones to watch.

Deep Green: Modular, high-intensity data centres for AI infrastructure

The AI revolution is a hot-button topic that plenty of startups want to get into – and London-based startup Deep Green is playing its part by kickstarting that revolution while trying to take the waste heat that such high-intensity compute creates and pushing it back into the circular ecosystem.

The idea is simple: harness GPUs’ heat output by putting them in a tank, then connecting that tank via heat exchangers to swimming pools that can act as a heat sink. The benefits are two-fold: the chips run less hot as a result, meaning there’s higher performance and more uptime – a massive issue given the challenges of sourcing bleeding-edge AI chips in a very tightly supplied market – and you also manage to reduce the energy bills for local businesses and turn what would otherwise be wasted into something useful. “The goal was to prove that data centres could be efficient, civic and sustainable, not just hidden industrial sites on the edge of the grid,” says Matt Bagwell, chief marketing officer at Deep Green. “We have a pipeline of dozens of potential host sites, and have projects already in development across the UK and North America.” The aim is to deliver multiple operational sites across the UK during the next year, starting with one site in Urmston, Greater Manchester.

In terms of what’s next for the company, Bagwell says: “Further integration into district heating projects and further innovations across the urban ecology concepts, including implementing multiple power sources on private wire and behind-the-meter, and collaborating with numerous heat energy off-takers.”

Paragraf: Graphene-powered electronic devices for advanced computing

One area of tech that is intrinsically linked with the UK is the use and deployment of graphene. Paragraf, a Cambridgeshire-based firm, claims to be the first company in the world to mass produce graphene-based electronic devices using standard semiconductor processes. Spun out from the University of Cambridge in 2018, Paragraf has managed to raise plenty of cash from investors eager to capitalise on the potential of graphene, considered a wonder material that can change how we interact with objects. It’s attained more than $85 million across three rounds of fundraising.

“Silicon and other semiconductor materials are reaching the limits of their capability to respond to next-generation demands of quantum computing, AI and other advanced computing applications,” says Simon Thomas, CEO of Paragraf. “Graphene’s superior electron mobility, form factor and thermal robustness mean that it can power advanced devices with superior performance on significantly lower energy.”

The company, which stems from a project where Thomas was working with Prof. Sir Colin Humphreys at the University of Cambridge in 2015, has partnered with the likes of Rolls-Royce, CERN, National Physical Laboratory and the European Magnetic Field Laboratory. “Paragraf’s methods demonstrate the feasibility of real-world graphene electronics and finally prove that devices made of two-dimensional materials can be produced at commercially viable scale,” says Thomas.

That’s important not only as a proof of concept for Paragraf, but for graphene more broadly, reckons Thomas. “Paragraf is transitioning from proving that our technology works to demonstrating we can deliver at commercial scale,” he says. “With our recent funding boost and expanding customer base, we are well-positioned to bring graphene electronics from theoretical to mainstream.”

Phasecraft: Developing, then supercharging, quantum algorithms

Phasecraft is a leading quantum algorithm company that spun out of University College London (UCL) and the University of Bristol around six years ago^. It was founded by three long-time academics – Toby Cubitt, Ashley Montanaro, and John Morton – who each had 20 years of experience in quantum theory. The company was formed at a pivotal moment when quantum hardware was finally becoming a reality, on the cusp of performing computations beyond the reach of any classical supercomputer.

The founders identified a critical gap in the emerging field: academic theorists were focused on writing theorems, while the hardware teams lacked the deep algorithmic expertise to create practical applications. Phasecraft’s mission is to bridge this gap by designing quantum algorithms that can run on the “noisy”, imperfect quantum computers that exist today, not in a decade’s time.

Rather than focusing on theory, the company pursues “applied” algorithms research, engineering solutions that are practical for current machines. This approach has yielded dramatic breakthroughs. In one of its first projects, Phasecraft improved the best-known algorithm for a materials simulation problem by a “factor of a million,” says Cubitt. This software optimisation alone, Cubitt notes, represents the equivalent of “10 years of hardware development”. The company operates on all major quantum hardware platforms, giving it unique insight into the technology’s progress.

Phasecraft didn’t spin out of UCL with existing IP, but rather with “smart ideas” and the credibility of its founders. The potential of the firm attracted deep tech investors who were willing to countenance the long-term, high-risk nature of the challenge. The company secured a £750,000 pre-seed round, followed by a £13 million Series A, and has recently raised £34 million in its Series B funding round – and has since generated a substantial portfolio of its own intellectual property.

The company’s goal is to be the first to deliver commercially useful quantum applications, targeting high-value problems in materials science, chemistry, and optimisation, where even a 1% improvement in battery cathode efficiency could be worth billions. The main hurdle remains the hardware, which still needs to improve by a factor of 10 to 100 before Phasecraft’s solutions can achieve commercial relevance. But with quantum improving all the time, Phasecraft definitely is one to watch.

Vsim: The operating system for training robots

Humanoid robots are set to be a massive part of our lives if tech titans like Elon Musk are to be believed. Millions of humanoids could live and work alongside humans in the years to come, with a positive impact worth billions of pounds to the economy, the tech’s boosters claim.

There’s just one problem: making them work is tricky. It requires intensive training to ensure that robots can operate in an environment made for humans – and interact accurately and safely when humans do what they tend to do, which is act in non-rational ways when you least expect it.

That’s where Vsim comes in. The Manchester-based firm has plenty of pedigree: it was founded by a clutch of former engineers at Nvidia, which is also developing its own AI model for the ‘brains’ of robots, called GR00T. Founded in 2022, the company aims to develop high-performance multi-physics simulation engines suitable for robotics training, reinforcement learning, VFX, and real-time animation. Funded by EQT Ventures in August 2025 to the tune of $21.5 million, the young company is already valued at around $100 million. The company’s platform uses proprietary algorithms optimized for multi-core CPU and GPU architectures, allowing real-time physics and robotics simulation that can accelerate AI model training and testing – turning what remains a hypothetical future at present into a more rooted in reality option.

Breathe Battery Technologies: Software that makes EVs charge faster – and last longer

London-based Breathe is a 2019 Imperial College London spin-out building a software toolchain that models, controls and charges lithium-ion batteries more intelligently. Its adaptive-charging algorithms and simulation stack promise faster top-ups without changing cell chemistry, and can extend battery life by reducing damaging phenomena like lithium plating.

The company has real-world traction already despite only being in business for a few years. Volvo Cars invested via its Tech Fund and plans to integrate Breathe’s software in next-generation EVs, targeting up to a 30% cut in 10% to 80% charge times within two to three years, according to Reuters. (It’s already showing promise in Volvo’s ES90 model.) But vehicles are just the next step for the firm: Breathe’s control software is already deployed in consumer devices, including nearly 30 Oppo smartphone models, showing that it already works in a scaled-down version before it can be scaled up to vehicle level.

Backed by a $21 million Series B in May 2025, Breathe is rolling out a broader suite spanning battery simulation, embedded software and services for automakers and cell makers. “As the role of batteries expands across industries, so too must our approach to making them better,” wrote chief technology officer Yan Zhao in a blog post. “It’s no longer enough to focus solely on charging. We must deliver batteries that are safer, more cost-efficient, higher performing, and easier to design and manufacture.”

The biggest hurdle to adoption for EVs continues to be the speed at which the battery charges, then becomes less useful near its end of life. If Breathe’s software can reliably deliver faster charging while preserving health on production vehicles, it becomes a high-margin, defensible layer in the battery stack – and a UK deep-tech export with global leverage.