British Business Banks begins Direct Co-Investments

Team S · 2025-11-11T08:49:54.000Z

The British Business Bank (BBB) is increasing co-investments directly into U.K. scaleups, aiming to plug funding gaps-especially between Seed and Series A and at growth stage-while crowding in private capital. Under the Modern Industrial Strategy, the BBB has been allocated £4 billion for priority sectors and £2.6 billion for broader startups. Since shifting its approach in 2021, it has passed £250 million in direct co-investments across 33 tech and life sciences companies, with plans for a higher share-potentially up to 25% of Industrial Strategy capital-done via co-investment. Selection follows two lenses: topping up existing fund-backed breakout companies guided by power law dynamics, and backing research-intensive deep-tech and life sciences (including many university spinouts) that need time and capital to reach market. The BBB is expanding its team and launching the British Growth Partnership to invest directly in growth-stage companies on behalf of institutional investors (e.g., NatWest Cushion, Aegon, London CIV), helping pension funds-per the Mansion House direction-engage with VC via curated products. Supporting policy includes pooling local government pensions by 2026, with at least one £100 billion pool, as outlined by Pensions Minister Torsten Bell, to enable larger schemes to bear VC risk and increase investment in innovation. Overall, the strategy uses public funds to crowd in private capital, easing access to growth funding for U.K. scaleups.

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British Business Banks begins Direct Co-Investments | Newnex