More funding comes on stream for early stage companies in another sign of the UK’s thriving start up culture.
Another boost to the UK’s start-up scene this week with the news that London-based venture capital firm Concept Ventures has launched a £50m fund to invest in British pre-seed startups and address the “major gap” in that stage of the investment ecosystem.
According to the fund’s managers, it will invest between £100,000 and £600,000 in more than 60 start ups over the next four years.
The programme marks a significant collaboration with the British Business Bank, which is providing a cornerstone £30m investment to the oversubscribed pre-seed fund. Those funds came via the bank’s Enterprise Capital Funds (ECF) programme.
“There is a major gap in the pre-seed ecosystem, with too few funds offering dedicated pre-seed expertise,” said Reece Chowdhry, founder and general partner of Concept Ventures.
We are completely focused on this critical stage of a company’s life cycle and are able to provide the funding, expertise and network they need to succeed. We’re deeply committed to setting our portfolio up for future success.
Ken Cooper, managing director, venture solutions at the British Business Bank, said: “Our cornerstone commitment to Concept Ventures will help them to provide finance and support to young and diverse, high-potential businesses at the pre-seed stage, helping to close the early stage equity funding gap.”
The news of the new funding came in the week of new research that showed that regional funds from the British Business Bank have backed the growth of innovation-led businesses, according to a new report.
A joint research report titled Backing Innovation-led Businesses: the role of public investment said that 36 per cent and 31 per cent of firms in the Northern Powerhouse Investment Fund (NPIF) and Midlands Engine Investment Fund (MEIF) equity portfolios respectively were ‘research council spin-outs’ and/or had received funding for R&D projects from Innovate UK.
“In the UK we have a difficult time getting early stages funded,” Nick Bassett, head of investor partnerships at Innovate UK, the Treasury-backed agency responsible for supporting UK knowledge-intense start ups, recently said.
In Bassett’s view, the UK VC ecosystem has failed to capitalize on the IP developed by smaller start-ups. “And we’re now asking why? Why are companies looking overseas for investment, and why are we failing to capture the value of the work that’s going on?”
He believes money needs to be deployed at the earliest stages where the highest risk sits.
So the question I think should be how do we get that money into the system at an early stage.
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