2025 UK Seed Fundraising: Research Pack

This research pack provides founders with verified benchmarks, sector insights, and policy context to help plan a realistic seed raise.

By Hannah Reed••Research Pack
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2025 UK Seed Fundraising: Research Pack

Seed-stage fundraising in the UK during 2025 is showing cautious signs of recovery compared to the downturn of 2023. Round sizes and valuations are stabilising, although the market remains selective. Founders should expect fewer but larger cheques, with standout sectors such as AI, life sciences, and climate attracting the most attention. Policy changes, particularly around SEIS/EIS, continue to shape fundraising strategies. This research pack provides founders with verified benchmarks, sector insights, and policy context to help plan a realistic seed raise.

We've taken a dive into the latest stats for you. From the British Business Bank’s Small Business Equity Tracker 2025 (BBB/Beauhurst data), Office for National Statistics (ONS) inflation releases, Bank of England (BoE) MPC materials, HMRC Venture Capital Schemes Manual and helpsheets, FCA Handbook (COBS 4.12A/B) and policy statements (PS22/10), UKRI/Innovate UK programme pages, and market guidance from UKBAA and reputable market operators.
Where we state ranges (e.g., cheque sizes, dilution), they are framed as market guidance rather than hard rules.

1) Market Snapshot & Macro Conditions

The UK macro backdrop has become more favourable in 2025. The Bank of England base rate stands at 4.00% following an August cut (Bank of England, Aug 2025).

Annual CPI inflation was 3.8% in July 2025 (ONS, 2025). While this environment improves investor risk appetite versus the previous two years, investors remain selective and typically expect 18–24 months of runway.

Liquidity in the wider venture market remains below the 2021–22 highs, but seed and early-stage investment has proven relatively resilient (British Business Bank, 2025).

Key takeaway: Founders should avoid relying on quick follow-ons and instead frame their raise around efficiency and milestones.

2) UK Equity & Seed Benchmarks

Equity investment into UK smaller businesses reached £10.8bn in 2024 (−2.5% YoY). Seed rounds represented a meaningful share, with:

Medians are more reflective of typical rounds, as averages are skewed by a small number of very large deals.

In 2025, typical software and marketplace seeds commonly fall in the £1.5–3.0m range, with valuations between £4–7m pre (guidance, sector-dependent). Dilution for priced seeds often sits around 18–25% (guidance).

(Source: British Business Bank, 2025)

Key takeaway: Benchmark your raise realistically: £1.5–3m at £4–7m pre is common. Expect 18–25% dilution and position your ask within these ranges.

3) Sectors & Geography

AI continues to dominate seed fundraising by value.

In 2024, AI deals were ~40% larger on average than the wider UK equity market and growth-stage AI deals averaged ~£36m (British Business Bank, 2025).

Life sciences and health remain robust, supported by a strong spinout ecosystem; spinouts accounted for ~17% of total equity investment in 2024 (British Business Bank, 2025).

Climate and energy are attracting more capital, especially when aligned to net-zero and public calls, though timelines are longer.

Regionally, Scotland, the North West, and the East Midlands saw increases in both deal count and value in 2024, while London retained the largest share (British Business Bank, 2025).

Key takeaways:
If you’re in AI, life sciences, or climate, investor appetite is strong.
Outside London, regions like Scotland, North West, East Midlands are gaining traction so it's worth considering branching out for talent and investor access.

4) Inclusion & Founder Demographics

Representation remains uneven.

In 2024, 27.5% of deals involved at least one woman founder, accounting for 16.6% of value.

All-female teams secured 6.8% of deals and 1.8% of value (£190m across 140 deals) (British Business Bank, 2025).

Historic cohorts show a persistent gap in follow-on: all-female teams progress less often than all-male teams.

Founders from underrepresented groups may benefit from S/EIS angels, targeted syndicates, and government-backed validation routes.

Key takeaway: Diversity gaps unfortunately persist. Women and under-represented founders should highlight traction early and consider targeted angel syndicates or SEIS/EIS networks that actively back diverse teams to increase opportunity.

5) Investor Routes & Cheque Patterns

Founders typically combine investor types to complete a seed:

Key takeaways:
Mix and match, for example angels + syndicates + micro‑VCs to complete a round.
Crowdfunding works best for consumer and/or community brands.

6) Instruments & Terms (2025)

Common instruments and S/EIS considerations:

Key takeaway: Use ASAs for early commitments and ensure compliance. Consider SAFE‑style agreements only when adapted to UK law and always check for S/EIS eligibility to optimise on available 'discounts'.

7) SEIS/EIS (as of Aug 2025)

S/EIS remain cornerstone policies for UK angel investing.

Key takeaway: Secure Advance Assurance early to build investor confidence. Design your round to fit SEIS/EIS criteria because it's crucial for angel participation.

8) Grants & Public Capital (2025)

Public funding can complement, not substitute, private seed rounds:

Key takeaway: Use grants/loans to de-risk tech and extend runway, but don’t rely on them as substitutes for equity.

9) Crowdfunding in 2025

Equity crowdfunding remains useful for consumer brands and communities. Median raise ~£500k (2024) (Beauhurst, 2025). The FCA’s Restricted Mass Market Investment (RMMI) regime requires prominent risk warnings, appropriateness tests, and a minimum 24‑hour cooling‑off period before a first‑time retail investor can view a direct‑offer financial promotion (FCA PS22/10, 2022., FCA Handbook COBS 4.12, 2025.).

Key takeaway: Crowdfunding works for brand-led businesses, but it's important to budget time for FCA compliance (including investor tests and cooling-off periods).

Key references and further reading

Tags:2025 Trends & Insights