£180m boost for UK AI innovators as British Business Bank backs six funds
The British Business Bank has committed £180m across six venture capital and growth equity funds, creating deeper pools of capital for the UK’s high-potential AI and deeptech companies. From foundational technology to applied solutions, the funds will back the UK’s AI innovators across all stages, from inception and early-stage funding through to Series B and beyond.
The six fund commitments are:
- £35m to Crane III which backs founders globally from inception through seed, building foundational technologies at the intersection of AI, software, infrastructure and deep science.
- £20m to Connect V which backs exceptional technical founders at pre-seed stages. Connect V will invest at the intersection of AI, hardware and real-world automation.
- £22m ($30m) to Entrepreneurs First’s Early Stage Fund, which backs the emerging leaders from the EF platform at Seed, Series A & Series B, including high-potential AI infrastructure companies.
- £55m ($75m) to Intrepid Growth Partners Fund I, a specialist growth investor dedicated to AI. Its inaugural $525m fund will invest in the next generation of AI talent, bringing growth capital to help founders build global champions.
- £26m (€30m) to Headline EU VIII, a $400m fund that will back Seed and Series A companies across Europe, with a focus on AI.
- £22m ($29m) to Evantic Fund I which invests in and partners with globally-focused transformative AI companies at the growth stage.
These commitments advance the Bank’s strategy to increase the depth of capital for fast-growing UK companies across the Digital and Technologies sector, identified as a growth-driving sector in the Government’s Modern Industrial Strategy. The funds will help more of the country’s most promising businesses to build and scale in the UK.
Alongside its investment through funds, the Bank is backing UK AI companies directly. Yesterday, the Bank announced a £10m investment in Salience Labs, the Oxford spinout building optical switching technology that removes a key bottleneck in AI networking. The investment will support the company’s expansion and follows recent direct investments in Wayve, Kraken Technologies, PhysicsX, PolyAI and Ineffable Intelligence.
The Bank is the largest investor in UK venture capital funds, having backed more than 150 funds. This creates deeper pools of capital for smaller companies at all stages of growth and builds the size and breadth of the UK venture capital market.
The UK is a world-leader for innovation and company creation, with particular strengths including AI and deeptech. However, building more global technology leaders in the UK requires deeper pools of domestic capital to support companies as they grow.
Leandros Kalisperas, chief investment officer of the British Business Bank, “The UK has no shortage of ideas or talent. The problem is that our funding landscape does not currently match our technical excellence. This is what the Bank is changing. These commitments are part of our strategy to create deeper pools of funding at all stages of growth, helping companies to access greater capital domestically and allowing the UK to capture more of the economic value of its innovation.”
Business secretary Jonathan Reynolds said, “AI is going to be a transformative technology for our society and for our economy, which is why it is vital that the UK has its own sovereign capabilities. We have exceptional talent and world-class research capability, now we are working to make sure that there are funding opportunities for AI entrepreneurs which match that potential. This £180m investment from the British Business Bank will help to build the next generation of safe, secure, homegrown companies, ensuring we are AI makers, not AI takers.”
Matt Miller, founder and managing partner, Evantic Capital, said, “We chose to build Evantic from London to be a bridge between Silicon Valley and the UK: helping non-UK companies invest and build here, and giving our UK companies a Silicon Valley network to help them win globally. We have already invested or committed over £150M in UK businesses. Nine of our non-UK portfolio companies have opened London offices here. The British Business Bank understands growth-stage risk as we do and is committed to a stronger UK. We are grateful to have them as a partner. As the UK succeeds, we all succeed.”
Robert Greenwood, senior director, funds, at British Business Bank, “Building the UK’s AI ecosystem requires more capital, but companies also need the right investors at each stage of their development. The commitments announced today back specialist investors that will help AI founders build companies from their earliest stages through to global scale.”
Carl Bishop, partner and head of funds at Entrepreneur First, said, “Our relationship with the British Business Bank dates back to 2016 when they anchored EF’s first institutional fund. They have been an invaluable partner as we have scaled, providing sage advice along the way as we’ve grown. They have since also backed many of our companies, like PolyAI, Accurx and Hadean, with direct investments. We are delighted to continue our long-standing relationship by working together on this fund, which will help to maintain the UK’s position as a global hub for AI talent and innovation, as the importance and capabilities of this technology continue to grow quickly.”
Mark Machin, co-founder and managing partner of Intrepid Growth Partners, said, “The UK has an exceptional base of AI research, engineering talent and ambitious founders, but ensuring those companies can scale into global leaders requires deeper and more focused pools of long-term growth capital. The British Business Bank has been hugely impactful in strengthening that funding environment and helping more high-potential UK technology companies build and grow from here. We are delighted to have the Bank’s backing to invest in the next generation of AI companies emerging from the UK.”
The Bank is also working to mobilise greater institutional investment into UK venture capital. Earlier this year, the Bank launched VentureLink, an online portal providing pension funds and other institutional investors with direct sight of Bank-backed funds that are open to investment.
VentureLink currently features 18 funds open to additional LP investment, helping institutional investors identify opportunities, navigate the UK venture market and develop their investment strategies.