Early-stage funding booms in first half of 2025

The latest research from Pitchbook offers an optimistic view of Series A-B funding rounds; but also serves a warning that more established startups will find their later funding rounds far less lucrative. 

The data shows that Series A–B rounds remain robust, comprising 65.5% of total VC deal value in H1 2025 – up from 51.2% in 2024.

The boom has been driven by strong activity in pharma and biotech. However, the Pitchbook data shows that Series C–D funding has declined, capturing just 14.3% of deal value.

Early stage optimism

The Pitchbook report describes Series A-B funding as “resilient” despite “a weaker macroeconomic backdrop and increased market volatility”. There has been a slow down from the previous year, but the report acknowledges that 2024 was a “record” year. 

In H1, the capital raised reached £1.5bn. If this level continues for the rest of the year, private fundraising in the UK will have declined 59.6% year-on-year. 

Leading the pack for total investment are AI ventures and Big Data has entered the top ten sectors for the first time thanks to AI-linked applications. The report singles out life sciences as a “rare area of growth”, while pharma and biotech ventures enjoy “strong deal flow”. 

A shifting fund structure

The contrast with 2024 is not only one of capital raised. It appears the very nature of the fund structure has changed. The data reveals that most new funds raised are under £50m. In 2024, more than 15% of funds closing exceeded £250m. 

There have been some big hitters though no megafunds (£1bn-plus vehicles) to date. The report mentions the Adams Street European Venture Fund 2023, which raised £230.7m and was the fourth-largest close in H1 within all of Europe. 

This was followed by QuantumLight Capital Fund and 2150 Urban Tech Sustainability Fund II, which raised £188m and £166.8m, respectively. 

For capital raised, 69.6% of capital was in emerging firms in H1, compared with just 25.6% in 2024.

Quandary for more established startups

This report confirms what we have already seen in the market – that things are tough for rapidly-growing ventures or later stage startups looking at their third or fourth funding rounds. 

Warning bells were already sounding after the UK lost one of its most lauded startups – Deliveroo – in a buy-out by a US competitor. 

Other signs include the money transfer firm Wise’s decision to ditch its primary listing with the London Stock Exchange. Instead, it has gone for a dual listing but with the US as its primary base, despite the Chancellery pinning its hopes on a fintech boom. 

Despite this, there is confidence. This year’s funding may not hit the heady heights of 2024, but the Pitchbook report nods to the Mansion House Accord, an agreement signed in May 2025 by 17 major pension providers to allocate at least 10% of their defined contribution (DC) default funds. It estimates this “could unlock £50bn for private markets by 2030”.

Many UK tech companies are also reportedly mulling joining PISCES, the stock market for trading private company shares the government announced in May this year. It is hoped that PISCES will help to improve late-stage funding for private firms in the UK.

In the meanwhile, early-stage startups can be optimistic about securing their Series A-B funding. But it looks likely that the UK may lose more of our bigger and established startup ventures unless there is a dramatic change in the landscape.