UK early-stage fundraising is getting busier. What it means

In the 2025–26 tax year, HMRC received 4,085 applications for SEIS advance assurance, up 24% on the year before.[1] It’s one of several signs that more UK founders are getting ready to raise, and doing it earlier.

Early-stage investment is growing too, but it isn’t spreading evenly. More companies are raising for the first time, while a bigger share of capital is going into fewer, larger rounds. Taken together, the data points to a busier early-stage market, where being ready and reaching the right investors may count for more than it used to.

More founders are raising, and earlier

Advance assurance isn’t funding. It’s HMRC confirming that a company’s shares are likely to qualify for SEIS or EIS relief, which many angel investors expect before they invest. That makes application numbers a useful early signal of how many companies are preparing to raise.

And those numbers are climbing. SEIS applications rose from 3,285 in 2024–25 to 4,085 in 2025–26. EIS applications rose 4%, from 3,185 to 3,310.[1]

More companies are completing rounds, too. Beauhurst found that the number of companies raising equity for the first time rose 29.9% in 2025, to its highest level since 2021.[4] Under SEIS, the amount raised grew 14% to £276 million in 2024–25, with more companies using the scheme than the year before.[1]

The founders joining ThatRound point the same way. Among startups joining the platform, the share making revenue fell from 60.2% in 2025 to 43.2% between January and mid-September 2026, and to 32.4% between July and mid-September.

One likely reason is that building has got cheaper. Two founders can now build and sell a product in a few months, so more companies exist and they’re reaching investors sooner. Many arrive with a working product rather than just an idea: 38.2% of startups joining ThatRound are at MVP stage. They’re just looking for capital at an earlier point.

But capital is concentrating

AI was the largest single contributor to the growth in first-time investment in 2025, with its share of first-time equity value nearly doubling from 17.0% to 32.9%.[4]

Across the wider market, Beauhurst describes investors “backing fewer but substantially larger rounds”, with the average UK equity round reaching a record £5.4 million in the first half of 2026.[3] The British Business Bank found that the 10 largest rounds into UK smaller businesses took 23% of all investment in 2025, the highest share since 2020.[2]

The picture at seed is mixed. The British Business Bank recorded a 27% fall in seed-stage deals in 2025, and found that seed companies took longer to secure funding on average.[2] Beauhurst’s figures show a rise in first-time raises, but the two sources count deals differently. But longer timelines fit a market where more companies are competing for investors’ attention.

Standing out matters more

With more companies raising and capital concentrating, proof and fit are likely to count for more. Some investors already appear to be raising the bar at pre-seed. SFC Capital says more than half the businesses it now backs are making revenue at pre-seed, up from closer to 30% a couple of years ago.[5] That’s one investor’s experience rather than a market-wide figure, but it fits a market where founders are arriving earlier and investors have more companies to choose from.

Investors’ stated stage criteria add to this. On ThatRound, only around one in five investors include prototype-stage companies, and fewer than one in 10 include idea stage.

There are still investors backing idea and prototype-stage companies. There are just fewer of them than at later stages, so reaching the right ones matters more than reaching lots of them.

What this means for founders and investors

None of this is fixed. Advance assurance numbers for 2025–26 are still being processed, HMRC’s recent figures are provisional, and a few large AI rounds are skewing the averages. But the direction is consistent enough to plan around: early-stage fundraising looks busier, and founders who bring clear proof and target the right investors are more likely to stand out.

If revenue isn’t there yet, other signals have to do the work:

A team with a track record in its market
Evidence of demand, like pilots, letters of intent or a waiting list
Any traction, shown clearly and honestly
A clear reason why now, and why this team

Founders should also check investors’ stage criteria before pitching. With only one in five investors on ThatRound open to prototype-stage companies, a broad outreach list wastes time on both sides.

For investors, a busier early-stage market means more choice, and more to sort through. Today’s pre-revenue companies are the ones raising their next round in a year or two, so getting to know them early means you’re already in the conversation when they raise.

If building keeps getting cheaper, early-stage fundraising may well keep getting busier.

ThatRound helps founders find relevant investors who are a fit for their round, and gives investors relevant deal flow that fits their thesis. That way, both sides spend their time on conversations that can go somewhere.

If you’re a startup and looking to find relevant investors, start with your Free Investor Fit Snapshot to get an insight on how many investors could be a fit for your round.

About the data: ThatRound platform data covering startups that joined ThatRound between 14 February 2025 and 18 September 2026, and the stage criteria stated by investors listed on the platform. Revenue is trailing-twelve-month revenue from each startup’s investment profile. Most investors list several stages, so stage shares overlap. HMRC figures for 2023–24 onwards are provisional, and 2025–26 advance assurance figures include applications still being processed.