A new $100m (£75.1m) fund targeting fintech and SaaS businesses beyond the Series A stage has launched from London-based VC group Volution.
The Zopa Bank and Signal AI backer said it is looking to tackle the funding gap faced by UK tech companies progressing beyond early-stages of growth.
The UK tech funding scene is heavily dominated by early-stage rounds, with recent findings from HSBC Innovation Banking revealing that Series A investments and earlier made up three-quarters of VC term sheets in Britain last year.
Volution said its new fund would support companies that have already built solid revenue streams, but need capital injections to progress.
“The UK has a huge challenge at the moment. The government is laser focused on productivity and growth but there is a fundamental structural funding challenge,” said Volution managing partner James Codling.
“We have overfocused on unlocking cash at the very early stage through various tax efficient investment schemes but the money tends to evaporate post Series A. Companies get sold, fold or become walking zombies.
Companies backed by Volution’s new fund will have already determined a strong product-market fit, go-to-market strategy and achieved a minimum annual recurring revenue of £5m.
“Volution is the catalyst to propel them to the next stage, both financially and by leveraging the team’s extensive experience in scaling tech businesses,” Codling said.
The fund was launched in partnership with Japanese VC group SBI Investment Co.
“The UK is a global leader in FinTech and AI, with world-class universities, a strong regulatory environment and a thriving entrepreneurial ecosystem,” said Tomoyuki Nii, director and executive officer for overseas investment at SBI.
“These strengths make it an attractive destination for investment. Our cornerstone commitment to Volution comes at a time when Japan and the UK government are strengthening economic ties to drive growth across both markets.”
Listen: Podcast: Why the UK remains a fintech giant – James Codling, managing partner, Volution
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