Venture Capital/Analysis/ Top seed-stage UK VCs The UK dominates Europe’s startup scene at nearly every level — but which early-stage investors are best at tapping emerging seed-stage companies? By Sophie Zhang 11 July 2022 Seedcamp Seedcamp \Venture Capital 9 European training programmes for wannabe VCs By Selin Bucak 21 February 2023 Venture Capital/Analysis/ Top seed-stage UK VCs The UK dominates Europe’s startup scene at nearly every level — but which early-stage investors are best at tapping emerging seed-stage companies? By Sophie Zhang 11 July 2022 The UK dominates Europe’s startup scene. It attracted $40.8bn of venture capital funding in 2021 — $20bn more than Germany — boasts 48 unicorns and has more than 40k startups to its name, including companies like Multiverse and Nothing. That leaves a lot for investors to chew on. Using data from Dealroom, Sifted has put together a list of the top seed-stage investors in startups in the UK. You can find Dealroom’s full methodology here, but the rankings are based on the following data points: Number of unicorns in portfolio; Number of “future” unicorns in portfolio; Number of rounds in the last 12 months. Dealroom has also weighted the rankings by a “dilution score”, with firms that invested early in companies that went on to become unicorns scoring more highly than those that joined at a later stage. This ranking looks at investments made in the UK, but from investors based anywhere. Do note that some of the top seed investors in the UK are investing at both seed and Series A. Top seed investors in the UK 1. LocalGlobe Latest fund: Last month, LocalGlobe announced that it had raised $500m for its four funds, including a new scaleup fund to back startups to IPO and beyond. Focus: LocalGlobe is a UK-based VC firm. Its early-stage fund typically writes cheques between $1m and 4m for pre-seed and seed stage startups. Deal count in the UK in 2021: 31 Gender split of investment team: Three women investors, nine men. Notable investments: Papercup, an AI-powered video translation software company based in London. Otta, a jobs search platform headquartered in London. Cleo, a company building a financial assistant for Gen Z, also based in London. Advice for your portfolio founders in the current market: It’ll take longer to raise capital as VCs become more cautious and take longer to make decisions. Valuations will come under pressure. Due diligence might focus a little more on unit economics and payback periods, and a little less on growth for its own sake. High cash consumption plans will be more difficult. Opportunities for M&A will increase for those well capitalised, and there may be significant consolidation in certain sectors. 2. Passion Capital Latest fund: Passion Capital’s £45m third fund was announced and launched in 2019, with 24 investments made so far. Focus: Passion Capital invests in early-stage companies across the UK and Europe. Deal count in the UK in 2021: 10, all pre-seed Gender split of investment team: Two female partners, one male partner. Notable investments: Monzo. GoCardless, a fintech firm based in London. Marshmallow, a car insurance company headquartered in London. Butternut Box, a pet food startup headquartered in London. Advice for your portfolio founders in the current market: Focus on managing burn, runway, hiring the best people and team possible and getting to product-market fit. 3. Seedcamp Latest fund: Seedcamp’s £78.5m fifth fund was announced in 2020. Focus: Seedcamp is a sector-agnostic fund with investments across Europe. It typically writes cheques between £300k and 700k in seed and pre-seed companies. The team seeks to invest early in founders who can attract large, global markets and solve real problems using technology. Deal count in the UK in 2021: 19 new investments Gender split of investment team: Three women and four men. Seedcamp was also founded by a woman, Reshma Sohoni, who is still the managing partner. Notable investments: Revolut, a fintech headquartered in London. THIS, a plant-based meat company also headquartered in London. Yonder, a credit card company based in London. Advice for your portfolio founders in the current market: Focus on the right customers. Be careful to avoid overspending. Raise as much cash as possible. 👉 Read about the top early-stage investors in: CEE France Germany (seed investors) Spain The Netherlands The Nordics The UK (Series A) 4. Episode 1 Ventures Latest fund: Episode 1 announced a £60m fund in 2018. Focus: The team invests in around 10 pre-seed and seed companies each year, writing cheques between £250k and 2m. The majority of its investments are in the UK, but it also invests in some international companies. Gender split of investment team: 20% women, 80% men in the partner team. Notable investments: Omnipresent, a startup headquartered in London that helps teams recruit and onboard remote workers. Carwow, a company that helps to connect car buyers and car dealers, headquartered in London. Phasecraft, a quantum computer software company based in London. Advice for your portfolio founders in the current market: The team generally advises having a plan that includes a runway of 18 months, but ideally longer. 5. Hoxton Ventures Latest fund: The close of Hoxton Venture’s third fund — of $215m — was announced in March. Focus: Hoxton Ventures invests in companies across Europe, focusing broadly on consumer, B2B SaaS and deeptech companies. It invests at pre-seed and seed stage, writing cheques of $1m to 5m. Deal count in the UK in 2021: 12 Gender split of investment team: Three male partners. Notable investments: Ochre Bio, an Oxford-based biotech company. XYZ Reality, a construction tech startup based in London. Deliveroo, Darktrace and Babylon, which all listed in 2021. Advice for your portfolio founders in the current market: Keep a close eye on burn rates. Expect the markets will be tighter this next 12 to 18 months and plan accordingly for an extended fundraising period. Good companies will continue to get funded, but the bar is increasingly high. 6. Entrée Capital Latest fund: Entrée Capital’s latest fund of $330m was announced in January this year, bringing its total funds under management to $1bn. Focus: Entrée Capital is a global venture capital firm that manages $1bn across nine funds and has invested in hundreds of startups across the globe. Typically the team writes cheques of $250k to 2.5m for pre-seed and seed-stage companies, and cheques of $1m to 3m for Series A companies. The team is particularly interested in fintech, crypto, SaaS, DevOps, data, deeptech, foodtech and proptech companies. Deal count in the UK in 2021: 9 Gender split of investment team: Three male partners and one female partner. Notable investments: Ecologi, a climate tech company based in Bristol. Vyne, a B2B fintech based in London. Debut, a careers app for students and graduates headquartered in London. Advice for your portfolio founders in the current market: At pre-seed, we continue to advise our founders to have laser focus and allow themselves enough time to get it right (no use hiring ahead and spending aggressively if the basics aren’t right yet). At later stages we’re encouraging founders to get as close as possible to default, alive. Emphasis is on sustainable growth, not growth at all costs. 👉 Read: How to spend your seed funding Other top seed investors in the UK Anthemis Group — an early-stage investor with a focus on fintech. Kima Ventures — a Paris-based fund that writes one-off cheques of €150k. SV Angel — an early-stage fund based in San Francisco. IQ Capital — UK-based VC investing in early-stage deeptech companies. Sophie Zhang is an editorial assistant at Sifted. Related Articles HV Capital launches Germany’s first continuation fund of €430m By Miriam Partington in Berlin Click here to read more Wolt and Einride-backer EQT Ventures closes €1bn fund for early-stage startups By Eleanor Warnock Click here to read more Only 14% of angel investors in the UK are women, report finds By Miriam Partington in Berlin Click here to read more 9 Polish startups to watch, according to VCs By Zosia Wanat Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?