31JUL

Exeter spinout raises GBP3m for epilepsy

2 min read

12:32UTC

Neuronostics, an Exeter University spinout, raised GBP3m for BioEP, an EEG-based epilepsy biomarker, co-led by Empirical Ventures and The FSE Group with an Innovate UK grant.

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Key takeaway

Neuronostics paired a specialist fund with an Innovate UK grant to raise in the shrinking spinout tier.

Neuronostics, a University of Exeter spinout, raised GBP3m for BioEP, a digital biomarker that reads routine EEG (electroencephalogram, a recording of the brain's electrical activity) to help diagnose epilepsy without waiting for a seizure ¹. Empirical Ventures, a UK health-specialist investor, and The FSE Group, a regional fund manager, co-led, with the British Business Bank, Ascension, QantX, New Wave and Bristol angels, blended with a GBP400k Innovate UK Investor Partnerships grant, a government co-investment programme.

The round sits in exactly the sub-GBP5m spinout tier the national tracker shows contracting sharply in 2025 . A specialist fund co-led it and Innovate UK grant money topped it up.

The Innovate UK grant matches private capital rather than replacing it, so GBP400k de-risks the private cheques around it, a different instrument from the VCT tax relief April's change cut. Blended public-grant-plus-equity rounds like this are how the thin end of the spinout pipeline is being held together one deal at a time.

Deep Analysis

In plain English

Neuronostics grew out of research at the University of Exeter. It has built BioEP, a tool that reads routine brain-wave recordings, known as EEGs, to help doctors diagnose epilepsy faster and without more invasive tests. The company raised £3m from two co-lead investors, plus a £400k top-up grant from Innovate UK, a government body that part-funds promising new British technology.

Source Landscape

This story draws on neutral-leaning sources

At £3m plus a £400k grant, Neuronostics' total funding of £3.4m is modest for a diagnostics platform that still needs clinical validation before wider NHS adoption, leaving little room for delay.

The grant covers roughly one-eighth of the round, which shows how thin Innovate UK's remaining early-stage funding pool has become relative to the private capital now doing most of the work that public grants used to carry alone.

Consensus view: The Wellcome Trust's health-innovation funding team sees blended structures like Neuronostics' £3m round, topped up with a £400k Innovate UK grant, becoming the default model for early health-tech spinouts as the retail angel base that used to fund them keeps shrinking .

Counter-view: Midlands Mindforge, the eight-university fund that wrote its first cheques in June , argues blended grant-equity financing is a stopgap: pooling several universities' capital directly into one larger regional fund still leaves an individual spinout better capitalised than a small private round patched together with a government top-up.

Key tension: Whether blended grant-and-equity financing is a durable long-term model for health-tech spinouts, or a patchwork response to a shrinking angel base that regional multi-university funds are better placed to fix.

Sources:UKTN

Mentions:Neuronostics →Radical Ventures →The FSE Group →British Business Bank →Innovate UK →Midlands Mindforge →Bristol →Fudan University →

First Reported In

Update #10 · AI takes record 44% as UK equity shrinks

UKTN· 4 Jul 2026

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Causes and effects

This Event

Exeter spinout raises GBP3m for epilepsy

A blended specialist-fund and government-grant round shows the contracting spinout tier is thinner, not closed.

Led to

Five seed rounds stir beneath megadeals

Neuronostics' £3m epilepsy-biomarker round is part of the same thin, cross-sector seed tier this week's cluster extends.

Occurred 8 Jul 2026

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Different Perspectives

Highland Europe

Highland Europe, the growth-equity firm behind a €1bn-plus fund, took €65m from the British Business Bank into its Technology Growth Fund VI on 30 July via British Patient Capital. For a Geneva-based growth investor, the Bank's cheque is routine cornerstone capital, unrelated to which Whitehall department currently claims to sponsor UKRI.

Integrity Growth Partners

The Los Angeles firm put £16.1m into Prevalent AI on 24 August, the London GCHQ-alumni company's first outside capital, specifically to fund its US expansion. Its stake is a single commercial bet on one UK deep-tech founder's American growth, not a comment on which department UKRI answers to this month.

Temasek

Temasek led PhysicsX's Series C on 30 July, into which the British Business Bank put $25m through British Growth Partnership Fund I. State-backed pension capital rides behind a foreign-led growth round while UK weekly tech funding fell 72% to £102.95m across nine rounds three weeks later.

Innovate UK's Women in Innovation cohort

Sixty-one founders won £75,000 grants from Innovate UK on 5 August, the programme's largest-ever cohort, with a further 39 highly commended founders taking support without cash. For these founders the sponsorship dispute over UKRI's parent department is academic: the money and mentoring arrived exactly as scheduled.

Financial Conduct Authority

The FCA added five fintechs, ClearScore, Modulr, Teya, Urban Jungle and Zilch, to its Scale-up Unit on 7 August, the first cohort it regulates solely rather than jointly with the Prudential Regulation Authority. The unit's expansion is a routine regulatory build-out running on its own timetable, unconnected to the sponsorship dispute over its sister department UKRI.

Cabinet Office

The Cabinet Office ran the DSIT-to-BIST transfer as a standard cross-government machinery change, the kind gov.uk pages and framework documents routinely take months to catch up with after any department is abolished or renamed. Officials treat the paperwork lag as administrative sequencing, not dysfunction: funding and grant-approval layers moved first because they had to keep working.