The SuperSeed Fund III has secured a commitment of up to £50m from the British Business Bank to invest in B2B AI and SaaS startups.
Fund III is focused on seed-stage companies building physical AI. This refers to artificial intelligence applied to physical industries such as manufacturing, energy, construction and autonomous systems.
The Bank has made its commitment through the Enterprise Capital Funds programme. By providing cornerstone commitments, the British Business Bank enables a fund to achieve a first close and helps the fund to execute their planned strategy more effectively and often to a greater scale.
SuperSeed’s portfolio companies build the software platforms, algorithms and control systems that make industrial infrastructure intelligent, as well as the integrated hardware to deliver complete solutions. Fund III will back companies across the full stack.
“The companies we back are deploying AI into manufacturing lines, energy infrastructure and construction sites, sectors where the UK has genuine industrial strength and strategic interest,” explains Mads Jensen, managing partner at SuperSeed.
“Two years ago, most of these were pilots. Today, they are live production systems with paying enterprise customers. That transition is what physical AI means in practice, and it is why the British Business Bank has returned as our cornerstone investor for a second fund.”
The Bank’s Enterprise Capital Funds programme aims to increase the supply of equity capital to early-stage UK companies with long-term growth potential and lower barriers to entry for fund managers looking to operate in the VC market, including providing a return structure that makes it more attractive to private sector investors.
The programme has backed 52 funds to date, representing more than £2.7bn of finance.
“SuperSeed has a strong track record of identifying innovators and a deep understanding of how AI can be applied to sectors of national strategic importance, including those of the modern industrial strategy,” says Christine Hockley, managing director and co-head of funds at the British Business Bank.
“This cornerstone commitment will crowd in additional private capital, backing innovative companies developing applied physical AI systems that drive and optimise efficiencies in critical business infrastructure.”
Last month, UKTN reported that the British Business Bank is exploring investments in the private equity space through a new £60m commitment to NorthEdge IV.
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