UK lawtech investment surges but fewer companies are chasing in

Nearly £230 million in first half of 2026

Investment in UK lawtech has soared to record levels, but fewer companies are benefiting from the funding boom, according to a new report.

The LawtechUK H1 2026 Investment Snapshot reveals that £226.9 million was raised in the first six months of 2026, already 20% higher than the £188.8 million raised throughout the whole of 2025. But while investment has climbed sharply, the number of companies benefiting has dropped from 27 in the first half of 2025 to just 17 over the same period this year, a fall of more than a third.

Instead, investors appear to be placing bigger bets on fewer businesses, with the average deal size more than tripling from £4.3 million to £13.35 million. The report reveals that just three companies, Orbital, Wordsmith AI and Lawhive, accounted for approximately £156 million, or 69% of all funding raised during the period.

The figures also point to a shift towards more established legal tech businesses, with over 70% of investment going to later-stage companies. Early-stage funding has not been left behind entirely, however, rising 82% year-on-year to £66.6 million.

The report suggests investors are increasingly favouring businesses that use artificial intelligence to improve existing legal workflows, such as contract management and document handling, rather than those built around generative AI alone. It found that technologies focused on streamlining legal processes have attracted more than £400 million in funding, compared with £92.8 million for gen AI tech.

London continues to dominate the UK lawtech scene, attracting £134.1 million in the first half of 2026. Scotland, however, is emerging as a major challenger, with its share of investment climbing from just 2.7% in 2024 to 23.4% this year.

Looking ahead, the report suggests annual investment could exceed £400 million in 2026, with its central forecast projecting £647 million by 2027. But with funding increasingly concentrated among a handful of established players, the latest figures suggest that while the UK’s lawtech sector is booming, not everyone is sharing in the investment windfall.