A new report from Music Technology UK (MTUK) has revealed that government agency Innovate UK has invested £14 million in UK music tech companies over the past five years (2020-2024) .
In its report titled Sound Investments: The Importance of UK Government Innovation Support, the UK trade association dedicated to supporting music tech innovation said that every pound invested returns £1.25 in additional private investment.
The report examines public sector funding into music tech companies and the extent to which this can unlock private capital. It follows last year’s launch of the inaugural Sound Investments report, which analysed the scale of private capital flowing into the UK music tech sector.
MTUK’s report comes amid a growing focus on music tech start-ups, including the GrowMusic business support programme, backed by the BPI, London’s growth agency London & Partners and Abbey Road REDD.
Digital Catapult, in partnership with Sony Music UK and Sony Music Publishing UK, and in collaboration with Channel 4, recently announced the 12 start-ups joining the 2025 cohort of its Black Founders Programme.
The MTUK research shows that Innovate UK’s investment amounted to 3.9% of total sector funding. At least 14 funding recipients – who were awarded a total of £4.5m in funding by Innovate UK between 2020-2024 – went on to raise £17.5m in follow-on private investment during the same period.
The report stated that it highlights how public funding can serve as a “validation signal and stepping stone to larger investment rounds”.
MTUK defines music tech companies as those that make their primary revenue from the development, production and exploitation of technology. This definition includes GenAI companies, events/ticketing companies, music production tech and sync technologies. If revenue is primarily from rights exploitation, then a company is considered part of the traditional music industry rather than music tech.
The news comes as the UK government has announced a record £500m funding package for research, development and innovation in the creative industries. It recognises the creative industries as central to the UK’s economic future.
Innovate UK funding into music tech has tripled between 2020 and 2024, culminating in record funding of £6.5 million in 2024.
KEY FINDINGS
Between 2020 and 2024, Innovate UK funded a total of 141 awards across seven different funding categories. Approximately 85% of these (122 awards) were grants for R&D.
Feasibility studies represented the second-largest category with 16 awards. The remaining awards were distributed among smaller specialised programmes such as contracts for innovation, knowledge transfer partnerships and innovation loans.
Music tech companies focused on production tools received the most Innovate UK awards (15) over the five-year period analysed. Award recipients included AudioStack, Karno, Vochlea Music and RoEx.
This category was followed closely by 13 awards given to education-based music tech companies (MusicGurus, UCan Play, Future DJs), 12 to GenAI music companies (DAACI, Bronze and soundpiece) and companies innovating in digital instruments/music making (Noise Orchestra, World Choir), and 10 given to health/ wellness-related music tech companies (Music In Mind Remote, MediMusic, Quietnote).
London-based companies dominated music tech funding, capturing 59.55% of total Innovate UK awards, while the South East (10.21%) and North West (10.19%) were distant second and third. The remaining regions collectively accounted for approximately 20% of funding, with Northern Ireland (2.14%), Scotland (1.07%), and Wales (0.10%) receiving the smallest shares.
Public funding remains less London-focused than private investment, with last year’s report showing that 94% seen in private investment was directed to London-based companies.
Matt Cartmell, chief executive, Music Technology UK, said: “In a sector where technological advancement drives a £1.49 billion recorded music industry, government funding acts as a critical proof point for commercial investors. It signals quality, reduces risk, and helps bridge the gap between brilliant ideas and market-ready products.
“As our report proves, the formula is working for music tech, delivering £17.5 million in follow-on private investment on a £14 million public funding foundation. But with public funding amounting to just 3.9% of total sector funding, we’re leaving value on the table. Music tech needs a meaningful share of the Government’s £500 million creative industries package to catalyse private capital and scale music tech’s vast potential.
“MTUK’s strategic priority remains clear: gaining recognition of music tech’s centrality to the creative industries. The potential returns – economic, cultural, and technological – far exceed the investment required.”
Music Technology UK’s report shows how targeted public funding can support early-stage innovation, helping companies develop new capabilities, build credibility and attract further investment
Tom Fiddian
Tom Fiddian, head of creative industries, Innovate UK, said: “Music tech is an important part of the UK’s creative industries and sits at the intersection of creativity and digital innovation. As the sector continues to evolve, including through greater convergence with areas such as AI and immersive technologies, it presents opportunities for innovation-led growth.
“Music Technology UK’s report shows how targeted public funding can support early-stage innovation, helping companies develop new capabilities, build credibility and attract further investment. Innovate UK will continue to work with industry, investors and partners across government to support the next wave of high growth potential companies in the UK’s music and creative tech ecosystem.”
To download the report click here.
MTUK and Innovate UK are hosting a webinar to discuss the key findings of the report on February 12 at 1pm. To register click here.
