The Treasury plans to launch up to 10 new venture capital funds across the UK to expand access to venture capital beyond London.
It said it has earmarked £100m through British Business Bank’s Investor Pathways Capital Initiative “to boost growth in every postcode.”
The initiative, which will invest £400m in total, helps businesses scale up as first-time venture capital investment fund managers from a wide range of backgrounds provide the early capital that innovative, early-stage businesses need.
John Healey, Chancellor of the Exchequer said: “One of my priorities as Chancellor is wealth creation. That means building an economy that helps people live well. I know there is a cost of business and it will not go unnoticed.
“This must involve stepping up our support for the businesses who invest in people, and this £100m boost will help provide the fuel to drive new life into local economies up and down the country.”
British Business Bank’s Investor Pathways Capital Initiative aims to:
- Increase the amount of investment talent in UK venture capital, fuelling long-term economic growth
- Widen access to essential early-stage capital and unlock opportunities for a broader pool of investors
- Strengthen the UK venture ecosystem and increase the likelihood of strong financial returns
The Bank said that the annual value of the UK equity market could be boosted by 13% if the unmet demand for equity investment from female and ethnic-minority-led businesses was sufficiently funded. As part of its ongoing commitment to widening access, it will target at least 50% of investment going to female fund managers that meet the access to capital requirements.
In June, the British Business Bank committed up to £90m to 10 new microfunds as part of the first Investor Pathways Capital cohort. Applications for the next cohort, which is part of the £100m deployment, will open in the Autumn.