The Science and Technology Venture Capital Fellowship was launched on January 22, 2025, by science minister Lord Vallance at the Royal Academy of Engineering.

This fellowship aims to provide tailored education, networking opportunities, and access to industry leaders to stimulate investment in R&D-intensive small and medium-sized enterprises (SMEs) in the UK.

Lord Vallance emphasized that the fellowship supports informed investment decisions, broadens capital access for new science and technology firms, and leverages research and development for economic growth.

Sir John Lazar, president of the Royal Academy of Engineering, highlighted the importance of deep tech companies for the UK's industrial strategy and productivity, calling for an attractive environment for entrepreneurs and large-scale investments.

The launch of the fellowship follows the 2024 'State of UK Deep Tech' report, which revealed a decline in overall venture capital activity in deep tech since 2022, despite strong performance in healthcare and AI sectors.

Deep tech, which includes transformative technologies in manufacturing, robotics, healthcare, energy, and artificial intelligence, has seen significant investment growth over the last decade.

Despite receiving over £5 billion annually in venture capital since 2020, the UK deep tech sector faced challenges in 2024, including higher interest rates and inflation, which have made funding difficult for startups.

Investors have become more risk-averse, currently favoring late-stage deep tech companies for larger deals, although AI startups remain an exception to this trend.

A report indicates a shortage of investors with expertise in deep tech, which hampers understanding of startup fundamentals and limits investment opportunities.

To address these challenges, the government-backed initiative aims to enhance investors' knowledge and experience in deep tech and life sciences.

Non-domestic investments in UK deep tech have remained robust, with over 300 deals annually since 2021 involving foreign firms.

Mutual funds, family offices, and sovereign wealth funds have significantly increased their investments in UK deep tech, participating in over 500 deals since 2021.