PEER-TO-PEER lenders are among the digital technology firms eligible to apply for a new venture platform backed by the British Business Bank (BBB), which will aim to invest more than £200m every year into UK startups and scaleups.
The accelerated digital ventures (ADV) platform will make equity funding available to small- and medium-sized enterprises (SMEs) in the digital technology sector. It will support existing digital technology hubs across most major cities in the UK.
Investment giants Legal & General and Woodford Investment Management are also supporting the new ADV platform.
“The UK has faced chronic underinvestment in physical and digital infrastructure for far too long,” said Paul Stanworth, managing director of Legal & General Capital.
“If we are to capture and catapult the best of British enterprise more akin to Silicon Valley, we need early-stage capital support. With ADV we are pooling together patient capital from three like-minded long-term investors as we back disruptive businesses and fuel innovation across all of the UK’s regions, not just in London.”
The platform will initially lend out £150m, with a long-term aim to increase this to more than £200m every year. A third of the £150m will be provided under BBB’s enterprise capital funds (ECF) programme.
ECFs are funds which bring together private and public money to make equity investments in high-growth businesses. This latest commitment – the 23rd ECF – brings the programme’s total investment capacity to over £815m.
“This new venture platform, supported by our ECF programme, will help innovative digital technology businesses to start up and scale up rapidly and successfully throughout all stages of their development,” said Keith Morgan, chief executive of BBB.
“We are pleased to be a part of this exciting new initiative, and look forward to seeing businesses across the UK benefit from the much needed long-term funding it will provide.”
“ADV has been established to help more of our emerging startups and scaleups to scale big,” said Lee Strafford, chief executive of ADV.
“There are world class innovators in every corner of the UK. We intend to seek out the best investment opportunities at scale and ensure these companies, irrelevant of size and location, have the support they need to supercharge growth.”
Last week, Peer-to-Peer Finance News reported that BBB expanded its Enable funding programme to include P2P lenders for the first time. The scheme has previously been open only to UK banks which lend to SMEs.