The British Business Bank announced a commitment of up to £90 million to support a new generation of UK venture capital fund managers.
The commitment marks the first investments under the Microfunds segment of the British Business Bank’s £400 million Investor Pathways Capital initiative.
The Bank will serve as a cornerstone investor in 10 new microfunds: Evertrue Capital, Common Ventures, Openseed VC, The Tech Bros Fund, Almanac Ventures, Future Impact Ventures, Blue Lake VC, Firstdoor VC, Mustard Seed Fund, and Twin Track Ventures.
The funds will range in size from £10 million to £20 million.
Investor Pathways Capital is designed to broaden access to venture capital by backing talented first-time fund managers from a range of backgrounds, especially those who have faced barriers to raising institutional capital.
The initiative is intended to support a more diverse and dynamic investment ecosystem across the UK while unlocking new sources of early-stage financing for high-growth businesses.
The British Business Bank said the program is expected to attract significant private capital while helping emerging managers establish institutional track records.
Collectively, the 10 microfunds will focus on pre-seed and seed-stage investing. They will provide first-cheque capital to emerging companies across sectors including technology, deeptech, artificial intelligence, climate, defence, and consumer.
The cohort also reflects the initiative’s focus on expanding access to institutional funding for underrepresented groups. More than half of the General Partners in the cohort are women, representing 57% of the total GP base, and 43% of GPs are from Ethnic Minority backgrounds.
Seven of the 10 funds are led by solo General Partners, while the remaining funds are led by two- or three-partner teams.
The cohort was selected through a competitive process that drew 151 applications for the Microfunds segment. All 10 selected funds are led by first-time institutional managers, many of whom are formalizing an existing investment edge built through operator experience, community-building, or early-stage investing activity.
KEY QUOTES:
“We have the right economic plan – backing the next generation of investors to spur growth and ensure businesses start, scale-up and expand across every part of the country. Alongside investments from the British Business Bank, our significant changes to the Enterprise Management Incentive scheme and our venture capital tax schemes at the last Budget will help entrepreneurs attract and retain the best talent while supporting around £100m of extra investment a year.”
Rachel Reeves, Chancellor of the Exchequer
“The first Microfunds cohort under Investor Pathways Capital represents an important milestone, delivering on our commitment to build the next generation of UK venture capital investors. By backing first-time fund managers and improving access to finance at the earliest stages, we are helping to create a more diverse and resilient pipeline of high-growth UK companies.”
Mark Sims, Managing Director and Head of Development Equity Funds at British Business Bank
“These funds bring deep sector expertise and highly targeted strategies across sectors like technology, artificial intelligence, climate and consumer. That specialism is critical at the earliest stages, where understanding emerging technologies and markets can make a real difference to company outcomes. These funds are positioned to spot and back ideas early, in sectors that will shape the future economy.”
Liz Bailey, Director of Development Equity Funds at British Business Bank
“Who gets to allocate capital shapes which ideas are funded, which companies are built and ultimately who benefits from economic growth. Investor Pathways Capital represents an important step towards broadening access to venture investing by helping talented emerging managers establish institutional track records. By de-risking participation for private investors and opening doors to a wider range of investment talent, the programme has the potential to strengthen the UK’s venture ecosystem and ensure that more of the country’s entrepreneurial talent can contribute to future growth.”
Meghan Stevenson-Krausz, former CEO of Diversity VC
