Molten reaches £175m close with state backing

Molten Ventures has reached a £175m first close for a new later-stage technology fund after securing a £75m cornerstone commitment from the British Business Bank.

The London-listed venture investor is targeting a final fund size of £350m, with the vehicle focused on Series B and later investments in high-growth technology companies across the UK and Europe.

Molten is committing £100m of its own capital alongside the British Business Bank investment. The fund will concentrate on sectors including artificial intelligence, fintech, quantum computing, deep technology, space, and hardware.

The British Business Bank commitment forms part of a wider attempt to increase the amount of domestic capital available once technology companies move beyond early venture rounds and require larger cheques to commercialise products, expand internationally, or build operational scale.

Robert Greenwood, senior director for funds at the British Business Bank, said: “This fund will help the next generation of tech entrepreneurs scale faster and build global companies from the UK.”

Molten has invested in European technology businesses for two decades and manages more than £2bn across the group. The British Business Bank said its relationship with Molten dates to 2018 and has included co-investments in Form3, Hadean, SatVu, Thought Machine, Paragraf, and IMU Biosciences.

The new fund creates a larger dedicated pool for later-stage rounds, a part of the market that has become increasingly prominent in UK industrial and financial policy.

Seed and Series A investors can finance initial product development, recruitment, and early commercial traction with relatively modest commitments. Businesses entering international markets or scaling capital-intensive technologies can require tens or hundreds of millions of pounds over subsequent rounds.

Those requirements are particularly pronounced in semiconductors, artificial-intelligence infrastructure, quantum technology, space, and advanced hardware. Many companies in those sectors need expensive equipment, specialist facilities, long research programmes, or regulatory approvals before reaching mature revenue.

Britain’s strong start-up and university research base has consequently produced a financing question further along the company lifecycle: whether enough domestic capital is available when successful businesses require much larger investments.

The British Business Bank increasingly uses cornerstone commitments to bring additional institutions into that market. Public capital committed at a fund’s first close can help a manager establish sufficient scale before attracting pension funds, insurers, endowments, and other private investors.

The Bank has also launched Venture Link, an online portal giving institutional investors visibility over funds backed by the organisation and open to new limited partners.

That approach sits alongside efforts to increase pension-fund investment in private markets. The challenge is partly one of allocation and partly one of market structure: large institutions need sufficiently substantial, professionally managed vehicles through which to invest meaningful sums without building direct venture teams themselves.

Molten’s £350m target creates greater capacity to participate in large later-stage rounds and continue supporting existing portfolio companies as their financing requirements increase.

The platform has completed more than 40 growth-profile deals and invested more than £700m in growth transactions over the past decade, according to the British Business Bank. Historical exits include Trustpilot, Wise, UiPath, Peak Games, and a partial exit from Revolut.

A large first close also reduces the risk that the manager has to return to investors repeatedly before making significant commitments. Molten can begin deploying capital while continuing to raise towards the final target.

The fundraising environment remains more selective than during the period of exceptionally cheap capital earlier in the decade. Investors have placed greater emphasis on profitability, cash generation, valuation discipline, and credible routes to exit, particularly for later-stage technology businesses.

That has increased demand for funds capable of supporting companies through longer holding periods and more measured public-market conditions.

The British Business Bank announced another scale-up initiative on Monday: plans for a separate £150m Northern fund targeting investments of £5m to £15m in high-growth companies and university spinouts across northern England.

The programmes serve different parts of the market. The Northern vehicle is regionally focused, while Molten’s fund will invest across the UK and Europe in larger technology rounds.

The £175m first close gives Molten half of its targeted final fund size at launch. Further fundraising will determine how much additional institutional capital ultimately joins the strategy and how much later-stage financing the vehicle can deploy over its investment period.