Small Business Equity Tracker 2025 (British Business Bank)

Summary

• The UK VC investment market represented 0.68% of GDP over 2022-2024, trailing the US ratio of 0.73% of GDP, resulting in an overall GDP-adjusted investment gap of 10%.p.6
• British Business Bank equity programmes supported 14% of UK equity deals and 17% of total investment value between 2022 and 2024.p.6
• University spinout deals raised £1.86 billion across 243 deals in 2024, accounting for 17.2% of total UK SME equity funding.p.28
• All-female founder teams secured 6.8% of UK equity deals in 2024 but received only 1.8% of total investment value, equating to £190 million across 140 deals.p.30
• Investment raised via the Enterprise Investment Scheme (EIS) declined by 20% in 2023/24 to £1.58 billion across 3,780 companies.p.58

Key insights

1. 1. UK smaller businesses raised £10.8 billion in equity funding in 2024, marking the fifth highest year on record despite deal counts falling 15.1% to 2,048.p.10
2. 3. The UK maintains a 1.3x GDP-adjusted VC funding gap with the US in R&D intensive sectors, while non-R&D intensive sectors perform in line with US levels.p.36
3. 4. The British Business Bank backed a quarter (24%) of all UK academic spinout deals between 2022 and 2024.p.6
4. 6. Deals involving overseas investors were more resilient in 2024, declining by 5.6% compared to a 14.5% decline for rounds backed exclusively by domestic investors.p.19
5. 7. Only 37% of all-female founder teams raised a second equity round after their first round, compared to 53% for all-male teams and 56% for mixed-gender teams.p.32
6. 8. Seed Enterprise Investment Scheme (SEIS) investment increased by 51% to £242m in 2023/24, supported by higher company investment limits of £250,000.p.58