22OCT

Exeter spinout raises £3m for epilepsy

2 min read

16:30UTC

Neuronostics, an Exeter University spinout, raised £3m 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 £3m 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 seizure⁠¹. 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 £400k Innovate UK Investor Partnerships grant, a government co-investment programme.

The round sits in exactly the sub-£5m 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 £400k 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 →Exeter →Midlands Mindforge →Bristol →Wellcome Trust →

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 £3m for epilepsy

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

Led to

Five UK deep-tech firms raise £41.5m in a week

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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British Business Bank

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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.