Technology has been a key driver of the music business in the digital age. But U.K. music tech companies are facing a funding crisis when entering their growth stage, according to the second annual Sound Investments report from trade association Music Technology U.K. (MTUK), which was unveiled on Monday and will be discussed at SXSW London 2026 later in its opening day.
Highlighting that funding for growth-stage firms plunged by 90 percent between 2020 and 2025 and that generative artificial intelligence continues its rapid rise, the trade group emphasized that “AI raises the stakes for government action.”
The study, entitled “Sound Investments 2026: Back the Sector,” produced by MTUK in partnership with research firm Beauhurst and lead sponsor support from consulting firm KPMG U.K., is based on an analysis of six years of investment data across 922 U.K. music tech companies.
Music tech includes the likes of streaming infrastructure, pricing and subscription systems, fan and other data and services that enable rights holders to better engage with fans, including through premium access, commerce, and community features. On the live music side, ticketing, venue operations and touring logistics are among the areas tapping into tech solutions. “Technology is the infrastructure on which the modern music economy runs – an infrastructure that spans live, recorded, publishing, sync, licensing, education, hardware, creator tools and more,” notes the MTUK report. “Growth is being driven not just by more consumption, but by new ways to package, distribute, and monetize music. Without innovations in infrastructure, that growth will undoubtedly fail.”
