The UK Government Uses Glass.AI to Discover and Categorise Firms in the Cybersecurity Sector.
The UK Government Department for Science, Innovation and Technology has published the latest analysis of the UK’s cybersecurity sector.
For the fourth year running our AI technology played a key role in validating last year’s dataset and identifying new cybersecurity firms and products. The report was compiled by Ipsos UK and Perspective Economics. Key findings include:
📈 74 new firms were added, bringing the total to 2,165 — a 3.5% increase.
💼 The sector now employs 67,300 people, up 11% with 6,600 new jobs.
A Thriving Industry Driving Economic Growth
The UK’s cyber security sector continues to be a key pillar of the digital economy, demonstrating substantial growth in revenue, employment, and investment. The sector generated £13.2 billion in revenue in 2024, marking a 12% year-on-year increase, and contributed £7.8 billion in Gross Value Added (GVA), up 21% from the previous year.
The industry now employs 67,300 professionals, with 6,600 new jobs added over the past year. The government’s AI Opportunities Action Plan underscores cyber security’s critical role in ensuring the resilience of AI-driven technologies, making this sector indispensable for the future digital landscape.
Market Structure and Key Players
The UK cyber security ecosystem comprises 2,165 active firms, ranging from startups to multinational corporations. While London and the South East remain hubs, regional expansion is notable, with half of cyber security firms now operating outside these regions. The North West emerged as a key growth area, attracting the highest share of external investment.
Large firms dominate revenue: Despite making up only 10% of the market, large firms generate 70% of total revenue (£9.3bn).
SMEs remain vital: Medium-sized firms saw the biggest revenue jump, rising from £1.9bn to £2.8bn.
Service-based firms lead: 71% of firms provide services such as cyber consulting, penetration testing, and managed security services, while 26% develop products.
Investment Trends and Challenges
Investment in dedicated cyber security firms totaled £206 million across 59 deals in 2024, down 24% from 2023, reflecting global market adjustments. Despite this, investor sentiment remains optimistic due to rising demand for AI-driven security solutions and robust UK innovation.
Key investment trends:
The North West leads investment: The region secured 49% of total investment, driven by high-profile deals such as PortSwigger’s £88 million funding.
Private equity and M&A activity is strong: Major deals include Thoma Bravo’s £5.3bn acquisition of Darktrace and Quorum Cyber’s expansion via acquisitions.
Early-stage funding needs support: Investors highlighted the importance of government-backed funding for startups, particularly university spinouts.
Future Outlook: Trends Shaping the Sector
The industry is evolving rapidly, with emerging trends influencing its trajectory:
AI Security: As AI adoption accelerates, securing AI systems will become a priority.
Cloud and Software Security: Increased demand for secure software solutions is driving innovation.
International Growth: UK cyber firms are expanding abroad, particularly into the US and EU markets.
Conclusion
The UK cyber security sector is experiencing robust growth, reinforcing its position as a global leader. While investment challenges persist, the sector’s economic contribution, expanding regional footprint, and innovation in AI security ensure its long-term resilience and success.
You can read the full report here.