The British Business Bank will focus its investment efforts on higher risk tech scaleup deals following its mandate to encourage economic growth.
The group unveiled a new five-year strategy on Monday in line with instructions from the government, as well as a sizeable funding increase, to grow the economy and reform how small businesses access finances.
In its new strategy, the development bank said it would adopt a higher risk appetite, targeting deals that support emerging technologies, especially those which the government wants the UK to lead in globally.
It will also focus its attention on scaleups, with mid-stage funding said to be the toughest to secure in the UK investment ecosystem.
The British Business Bank will target over 60% of venture and venture-growth investment towards scaleups, with the ability to write larger cheques of £100m and more into the “best growth-stage funds”.
As well as backing said funds, it will be making more direct investments to strategically support scaleups in critical sectors, ensuring access to domestic capital for such businesses is available.
“By 2030, our ambition is clear: a more dynamic and inclusive finance ecosystem, where innovative and ambitious companies – wherever they are based and whoever leads them – can access the capital they need not only to get started, but to scale, stay, and succeed here in the UK,” said British Business Bank boss Louis Taylor.
The announcement follows the bank unveiling NatWest Cushon, Aegon and M&G as backers in its pension-focused Growth Partnership Fund.
“Our small businesses have ambition and bright ideas in abundance, but too often they lack the finance they need to reach their full potential here in the UK, and as a result, our economy suffers,” said Business Secretary Peter Kyle.
“This has to change and with this new five-year plan it will. The Bank is increasing its pace of investment by two thirds, with a whopping £4bn boost for the most promising businesses in our Industrial Strategy sectors, supporting tens of thousands of businesses, creating jobs, and driving growth.”
