DSW Ventures has closed a £2m regional fund to invest in early-stage startups based outside of the ‘golden triangle’ of London, Cambridge and Oxford.
The Manchester-based investment firm said it plans to invest the full £2m in the current tax year and is searching for university spinouts to back in addition to seed-stage startups.
It is aiming to bridge what it calls “the persistent funding gap for regional startups”. British Business Bank data shoes that 70% of UK seed-stage investment is directed to startups in London and the South East.
The Seed Enterprise Investment Scheme (SEIS) fund will take advantage of tax incentives, including the recent changes implemented in the Spring Budget, which increases the limit from £150,00 to £250,000.
The SEIS expansion was first announced in former Prime Minister Liz Truss’s ill-fated Budget, but survived the reversals under Chancellor Jeremy Hunt.
Keith Benson, co-founder of DSW Ventures, said: “We intend for our inaugural fund to contribute to the levelling up of funding for early-stage regional businesses, while giving investors the opportunity to tap into an underrepresented asset class and benefit from the attractive Seed EIS tax incentives.”
DSW Ventures is the VC arm of the Dow Schofield Watts group and has invested £12.5m across 11 businesses since its launch in 2019. One of those is a startup called Propello, which creates white-label customer loyalty software for businesses such as Hello Fresh and JD Gyms.
The regional fund, first announced in March, received £295,000 from Dow Schofield Watts’ partners and associates.
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