Cambridge Aerospace and CuspAI to the fore as region's VC haul rockets

Buzzing loud in the region's honeypot were a £370 million investment for Essex business Rapyd Financial Network, while Cambridge-based defence specialist – the drone-busting Cambridge Aerospace – and materials startup CuspAI (this medium's Business of the Year) each secured £75 million.

For the uninitiated, Cambridge Aerospace is a one-year-old start up building missile and drone defence systems for Europe. It was founded by Steven Barrett, a former MIT aerospace engineer and current Cambridge University professor. As of September of this year, the company had 60 employees.

Tectonic reported that Cambridge Aerospace had two products – Skyhammer and Starhammer which are soon to ramp production in the UK and Europe.

According to UK filings, the company was founded in 2024 by Barrett, along with Anduril’s former director of Europe, the Middle East, and Africa, Chris Sylvan, and former UK defense secretary Grant Shapps. Junaid Hussain, chair and founder at holding company Auctor, also helped build the company,Tectonic reports.

The £785.1m VC haul for the region in the third quarter of 2025, compared to £389.5m in Q2 – an increase of more than 100 per cent. The uplift highlights renewed investor appetite in supporting the region’s small business community according to KPMG.

The £370m investment for Rapyd Financial Network backed the development of a digital fintech-as-a-service platform designed to order cash, exchange foreign currency and send money to friends.

The software sector continued to dominate East of England VC activity more broadly, with more than a fifth of VC investments in Q3 made into the segment, followed by pharmaceuticals and biotechnology, where 17 per cent of deals took place.

Joe Faulkner, East Anglia Office Senior Partner at KPMG UK, said: “This quarter, the East of England has once again proven itself to be a driving force within the UK’s venture capital landscape – home to a thriving start-up scene even as the national picture remains more restrained.

“The region’s strength this quarter lay in software, pharmaceuticals and biotechnology, which together accounted for much of the investment total. It’s clear that investor confidence remains strong in high-value tech and digital finance ventures, branching beyond the region’s long-established life sciences expertise.”

Nationally, KPMG reveals that the UK had bounced back in Q3 following a Q2 which saw it record its slowest quarter of VC investment in five years.

New figures showed that investment levels jumped to £4.6 billion across 594 deals, up from £2.6 billion across 435 deals last quarter, making the UK number one in Europe when it came to VC investment in Q3.

The quarter was defined by a mega deal in the AI space with NScale securing a £1.1 billion investment; other major deals included cloud infrastructure firm PS Miner, which landed £259m.