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The U.K.’s music technology sector has called for greater recognition following the publication of a brand-new report at SXSW London 2026.
On Monday (June 1), the trade association MTUK (Music Technology UK) released its Sound Investment report and hosted a number of panels and keynotes at the London conference, which runs from June 1-6.
Matt Cartmell, MTUK’s CEO, spoke to Billboard U.K. on the pressures the industry is facing and the current trend that’s seeing music technology companies struggling to fulfill their potential.
The Sound Investment report found that while music tech startups are able to attract investment in their seed phases, investments do not always follow through to the growth stage, which causes the U.K. to lag behind other markets. According to the report, investment in growth-stage companies has fallen by 90% — from £101 million ($138 million) in 2020 to £10 million ($13.7 million) in 2025.
“The U.K. has a strong pipeline of music innovation, but scaling globally requires more than capital. It needs earlier access to the right commercial guidance and networks to help level the playing field and translate innovation into growth,” says Patrick Molyneux, head of the venture fundraising advisory at financial giant KPMG.
MTUK defines a company as one that “makes its primary revenue from the development, production, and exploitation of technology, rather than from exploiting the commercial assets of the music industry (musical compositions, master recordings, live musical performances, or artist brands) or from analog product manufacturing (vinyl, guitars).”
The report says that in 2020, the level of investment in U.K. music tech companies matched up to 76% of funding compared to the U.S. But in 2025, that number dropped dramatically — to just 21%. Through 2023, the formation of U.K. music tech companies remained stable, with 66 new companies. But in 2025, that had fallen to just 28 new companies.
The Sound Investments report also exposes the U.K.’s concentration of music tech companies in London and the southeast of the country, with the region encompassing 64% of those companies. Meanwhile, companies based in Wales, the North East and Northern Ireland have registered little to no investment since 2020.
“There’s a problem with recognition of this as being an actual sector,” Cartmell tells Billboard U.K. “First of all, we’ve got to get really back to brass tacks right and recognize the fact that this is a sector that deserves funding. The way we look at it is that music tech is the infrastructure layer for the music industry and the global music economy.”
Cartmell explains that a clearer narrative would help music tech companies become more attractive to investors and provide a greater understanding of their role and importance in the music creation process. The Labour government’s Creative Industries Sector Plan in 2025 saw a number of provisions aimed at the music industry, particularly around support for grassroots music venues and supporting greater measures to protect fans from ticket touts — but the music tech sector was absent from the report, which Cartmell attributes to a lack of understanding of the role these companies play.
“There needs to be more recognition of the value that music tech brings,” Cartmell continues. “It’s not a beneficiary of the music industry; it’s actively responsible as a part of its success.”
Cartmell points to the unified approaches for the U.K.’s film, TV and video game industries, which have benefited from tax relief and investment programs to encourage growth. “A number of years ago, those industries were properly recognized as distinct sectors,” he says. “Once that happens, you can start to align specific investment vehicles, create tax incentives for investment and support the sector because you recognize the value of them to the U.K. economy.”
Furthermore, the political instability in the U.K. and the government’s muddled response to AI legislation has created uncertainty for investors. In March, the government abandoned plans for its “opt-out” model for rightsholders, with Lisa Nandy, secretary of state for culture, media and sport in the U.K., admitting at the time that the government’s “opt-out” approach had gotten it wrong. Paul McCartney, Elton John and a number of industry leaders had been among the names to protest this model and call for greater creator protections.
“[The government] needs to make some kind of decision [on A.I.],” Cartmell says. “Things will start becoming a bit more fluid as a result. There’s not enough fluidity in the sector at the moment, there’s not enough money moving around, and I think the government’s lack of response to A.I. is a big element to this.”
Cartmell says that the U.K’s music tech sector remains a world leader, particularly around “data collection and royalty infrastructure” as well as the “financial services sector.” He points to Yoto, an award-winning screen-free audio player for children, as an example of the sector’s resilience and ingenuity; the U.K. startup received $22 million in funding in 2024, with McCartney and Mark Zuckerberg among the investors. Audio equipment engineer Focusrite, formed in High Wycombe in 1981, is another example of a British company that continues to lead the way in its field.
The MTUK’s multiday showcase and conference at SXSW London welcomed representatives from the government, including Ian Murray from the Department of Culture, Media and Sport, and allowed new perspectives and ideas from within the U.K. as well as from attendees who had traveled from Europe and Asia. “We want to get fresh perspectives and get something done,” Cartmell says.
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