British Business Bank, a government-owned economic development bank, has committed £500 million ($625 million) to support diverse and emerging fund managers. The funding, provided under the bank’s Investor Pathways Capital initiative, aims to improve access to venture capital for underrepresented groups. A portion of the funds will be used to seed “microfunds” led by diverse founders, via the bank’s enterprise capital funds program.
“The UK equity market currently experiences a significant funding gap for diverse founders, negatively impacting their ability to start a business,” said British Business Bank’s Louis Taylor.
The new initiative, he said, “has the potential to unlock the UK’s full commercial potential and boost the UK economy.”
Women-led
Women-led businesses receive just 2% of venture capital in the UK, despite generating 35% higher returns than businesses led by men. The British Business Bank last year committed £50 million ($62.5 million) as part of an “Invest in Women Taskforce” that included Barclays, British insurer Aviva among others.
The funding was part of a £255 million ($318 million) tranche to invest in women-led funds and businesses. The bank is investing another £50 million for this purpose. It plans to allocate half of the Investor Pathways Capital initiative’s funding to female fund managers.
