Five technology trends set to shape investment in 2026

As featured in BusinessCloud.

LDC partner Chris Baker, has identified the five trends they think will shape investment into UK tech firms.

The UK technology sector has entered 2026 with renewed momentum.

After a cautious start to 2025, the second half of the year brought clear signs of recovery. Trading stabilised, confidence improved and end-market demand became more visible.

We invested in five businesses, completed four successful exits and supported our portfolio companies, ranging from fast-growing SMEs to global enterprise businesses, to deliver growth strategies that keep pace with industry change, including through nine bolt-on acquisitions.

In 2026, we continue to see plenty of reasons for optimism and have identified the following five trends which we think will shape investment into UK technology businesses this year.

Artificial Intelligence (AI) moves from pilots to deployment

AI will remain a defining opportunity in 2026, but the focus is shifting from experimentation towards deployment that improves productivity. That puts readiness in the spotlight – modernising core systems, improving data quality and embedding change so AI can be deployed effectively.

The businesses that will benefit most will be those applying AI to processes which are already established and, ideally, those with robust data foundations to feed learning models.

This will not only optimise speed to benefit but will also enable efficiency gains to be measured, which is critical in assessing ROI.

HealthTech gathers pace

The healthcare sector continues to present major opportunities for technology businesses.

The UK healthcare market is still relatively underpenetrated by modern technologies, with legacy systems often supporting workflows and treatment pathways.

There is strong potential and demand to adopt new technologies to enhance patient pathways and optimise service delivery, particularly from private healthcare service providers who are now generally adopting cloud-first strategies.

Ease of implementation, speed to benefit and protection of patient and service-user experience remain critical.

Investor appetite here is growing quickly, particularly where technology businesses can show clear adoption, resilient delivery and the ability to scale.

Taking Care, a provider of technology-enabled care products and services that we backed in December 2025, is a good example.

The business supports more than 150,000 customers across the UK with personal alarms, smart home monitoring and emergency response services, helping elderly people live safely and independently at home.

Multicloud adoption continues to rise

We expect to see more organisations running technology infrastructure in multiple cloud environments, with a mix of public, private and hybrid strategies now commonplace.

As data-led tools scale, organisations are paying closer attention to where data resides, how it is harnessed and the ease of interoperability across business systems.

With the rate of data creation continuing to accelerate, combined with increasing data regulation and compliance requirements, large organisations in particular are focused on ensuring security and compliance in a cost-effective manner.

For certain large and/or sensitive data sets, this is creating a shift away from hyperscale solutions and driving demand for private cloud and, in some cases, modern customer-hosted infrastructure, that provides distinct control, visibility and access to data alongside high-powered computing capability.

Across our portfolio we’re already seeing management teams make this shift. For example, we have supported the team at Aspire, an end-to-end managed IT service provider, to invest significantly in its technology infrastructure, including both its private cloud estate and modern network enhancements.

Data governance underpins success

Technology businesses will prioritise investing in data foundations that underpin their platforms, as this increasingly shapes how well they can operate and support customers.

The opportunity lies in ensuring that investment creates clarity and control, improving how data is defined, managed and used across the business, and supporting sustained focus on data governance alongside continued platform development.

This means putting in place the right data frameworks, policies and accountability, and ensuring analytics can be relied upon as the business grows and scrutiny increases.

UniHomes, a student accommodation advertising platform in which we reinvested in October 2025 after a transformational two-year partnership, is a good example of how effective this can be.

Continued investment in its platform and data foundations helped the business scale through peak letting periods and, as a result, UniHomes partnered with more than 1,000 letting agents and operators in 2025 alone.

Targeted acquisitions accelerate specialist capability

Targeted acquisitions are likely to remain the fastest way for technology businesses to add specialist capability and expand into new markets without diluting focus.

Acquisitions can accelerate progress by adding expertise, product capability or new customers faster than building organically.

We regularly support our portfolio companies to implement acquisitive growth strategies and helped our technology portfolio to make nine acquisitions in 2025.

Red Helix, an LDC portfolio company since 2021, strengthened its cyber assurance proposition through the acquisition of Risk Crew, expanding the support it can provide as security requirements evolve.

We’ve seen a similar focus at 15below, a specialist software developer we backed in 2024.

Its acquisition of Airport AI, a leading conversational AI platform for airports, extended its platform into airport communications, supporting a more connected passenger journey.

And Talos360, a leading HR SaaS provider, acquired Appraisd, a global performance management software platform, to complement and enhance its existing product range.