The Department for Business and Trade has granted the British Business Bank an additional £6.6bn of capital to invest in UK-based startups.
Chancellor Rachel Reeves recently announced in her Spending Review that the British Business Bank, one of the largest investors in small businesses in the UK, would receive increased “financial firepower” as part of a plan to stimulate domestic firms.
Reeves said the government would boost the development bank’s investment capabilities by two-thirds.
On Monday, Secretary of State for Business and Trade Jonathan Reynolds announced a new £4bn initiative, called British Business Bank Industrial Strategy Growth Capital.
This will be invested through the bank’s existing capabilities across eight sectors designated as growth driving: advanced manufacturing, clean energy, creative industries, defence, digital, financial services, life sciences and professional services.
“Using our market expertise and reach, we have a critical role to play in supporting smaller businesses in the eight growth-driving sectors to grow and stay in the UK,” said British Business Bank chief executive Louis Taylor.
An additional £2.6bn of capital aimed at backing entrepreneurs across all sectors has also been committed, with a goal of supporting high-growth regional clusters across the UK’s four nations.
Michael Moore, chief executive of the British Private Equity & Venture Capital Association (BVCA), welcomed news of this additional investment as it tackles long-standing issues. “The changes to the British Business Bank’s remit, enabling a number of strategic large investments in priority sectors, represents an important step towards more high growth companies attracting the capital they require.
“[These changes] also tackle the scale up gap – something that the British Business Bank’s previous remit would not have allowed it to do.”
This will support the launch of two new Nations and Regions Investment Funds in the East and South East of England. The bank has already established similar funds in the South West, the Midlands, the North of England, Scotland, Wales and Northern Ireland.
Moore added: “Specific funding to support high potential businesses across the UK’s nations and regions is particularly welcome as it will help to narrow imbalances in regional investment.”
The British Business Bank will also boost its existing regional funds with a £100m injection.
“To deliver the government’s growth mission it is also critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located across the Nations and regions of the UK,” added Taylor.
“This is a strong endorsement of the bank’s 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech.”
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