Phoenix Court has secured new commitments from the British Business Bank and NatWest as it seeks to increase the amount of domestic institutional capital available to UK technology businesses from seed stage through to scale-up.
The British Business Bank is committing £50m as part of a wider multi-hundred-million-pound relationship with Phoenix Court’s funds. NatWest is investing across LocalGlobe, Latitude, and Solar for the first time, joining existing institutional supporters including M&G and HSBC.
Phoenix Court said the multi-year partnerships are intended to support British science and technology businesses throughout their development rather than concentrating capital at a single financing stage.
Co-founder and chair Saul Klein said: “Britain has built the world’s third-largest innovation economy, but too many companies still lack the domestic capital to scale here.”
The investment group argues that the UK has a structural gap between its ability to create venture-backed companies and the amount of domestic institutional money available when those businesses require larger sums to expand.
Phoenix Court’s analysis identified around 1,800 UK venture-backed companies generating more than £20m of annual revenue, while fewer than 1% had received backing from major UK asset managers associated with the Mansion House initiative. It also estimates that successful British scale-ups continue to raise more than 80% of their growth capital from overseas investors.
The group’s Solar pilot provides one example of the model it is trying to expand. The fund backs 18 businesses across artificial intelligence, automotive technology, energy, financial services, advanced computing, robotics, semiconductors, and travel. Those companies collectively generate around £5bn of annual revenue and employ more than 8,500 people across the UK.
Portfolio businesses include Tide, Motorway, Monzo, Raspberry Pi, and CuspAI. Fourteen of the 18 generate more than £100m of annual revenue, according to Phoenix Court.
The latest commitments form part of a wider policy effort to increase British institutional exposure to private growth companies. The British Business Bank has made a series of commitments into later-stage and specialist funds, while policymakers have sought to unlock more pension and insurance capital for unlisted businesses.
The Bank is also developing a £150m Northern scale-up fund, adding another vehicle aimed at the later stages of company growth.
The challenge is not simply the availability of venture finance. Britain has a comparatively active early-stage ecosystem, but businesses requiring repeated rounds of larger growth capital frequently turn to US, Asian, Canadian, or Middle Eastern institutions with deeper pools of risk capital.
That affects who owns the companies, who receives future investment returns, and potentially where management teams build relationships with public-market investors. Overseas backing does not automatically cause a business to relocate, but policymakers increasingly want British pension savers and institutions to participate more directly in the value created by UK companies.
NatWest’s participation links a major UK bank more directly with the venture investment platform alongside its wider innovation-banking activity. M&G is meanwhile increasing its involvement after an earlier £50m commitment to the Solar pilot.
The new capital does not remove the execution risks inherent in scale-up investing, where valuations, liquidity, technology cycles, and the time required to reach an exit can vary significantly. It does, however, widen Phoenix Court’s institutional base at a point when the supply of domestic growth capital has become a central issue in UK industrial and financial policy.
You must be logged in to post a comment.