New government-backed scheme aims to close funding gaps and strengthen the venture pipeline by 2026
The British Business Bank (BBB), wholly owned by the U.K. government, is launching a £500 million (about $674 million) economic package to support diverse and underrepresented fund managers and founders nationwide.
- Scope: Targets both existing and first-time fund managers.
- Objective: Narrow the funding disparity in U.K. venture capital.
- Context: Builds on the BBB’s previous Enterprise Capital Funds initiatives.
Fifty million pounds will be ring-fenced for female-led venture funds, bringing the BBB’s total commitment to at least £100 million (around $135 million) for women-focused ventures and the government’s Invest in Women Taskforce.
- Milestone: Meets the Taskforce’s target of doubling investments into female funds.
- Impact: Aims for 50% of all package investments to flow through female fund managers.
- Background: The Taskforce, launched in 2023, tracks gender gaps across the ecosystem.
Meanwhile, £400 million (roughly $539 million) is earmarked to back more diverse fund managers, bolster early-stage companies, and expand the talent pipeline so that individuals from disadvantaged backgrounds can become investors themselves.
- Talent development: Includes mentorship programmes and scholarships for emerging GPs.
- Pipeline focus: Collaborations with universities and regional accelerators.
- Long-term goal: Cultivate a broader pool of angel and VC investors reflecting the U.K.’s diversity.
Deployment of the package is scheduled to begin in 2026, with first capital calls expected in the spring.
- Timeline: Fund structures to be finalized by Q4 2025.
- Roll-out: Regional workshops planned across England, Scotland, Wales, and Northern Ireland.
- Monitoring: Quarterly impact reports to be published from 2027 onwards.
“The initiative aims to reduce the significant gap in venture capital investment for underrepresented founders and investors,” the BBB stated in its recent press release.
- Commitment: At least 50% of this funding will be managed by female GPs.
- Transparency: All fund performance data will be publicly accessible.
- Accountability: Annual reviews to track progress against diversity benchmarks.
This move aligns with the government’s Plan for Change—a suite of economic strategies introduced in mid-2024 to drive long-term growth by breaking down barriers and expanding opportunity.
- Parallel efforts: New R&D tax incentives and regional innovation grants.
- Synergies: Coordination with the Department for Business and Trade.
- Outcome: Strengthen the U.K.’s position as a leading global tech hub.
For women and people of color, the U.K. venture landscape has remained challenging: only about 13% of senior VC roles are held by women, less than 2% of venture funding reached Black founders in 2023, and women received just 2 pence for every £1 invested.
- Data source: Women in VC Report, June 2023.
- Historical gap: Comparable to the U.S. in terms of funding imbalances.
- Call to action: Founders and fund managers are urged to apply when the call opens next year.
