The British Business Bank has more than doubled its direct scale-up investing in nine months, pushing past £600 million and growing its direct equity portfolio to more than 50 high-growth UK science and technology companies. The state-owned economic development bank announced on 29 June 2026 that it has invested more in the last nine months than in the previous four years combined.
The bank’s stated goal is to keep British scale-ups anchored at home as they outgrow the early-stage venture capital market. The jump in capital is also meant as a signal to UK pension funds and other institutional investors whose own allocation to domestic growth equity has thinned over the past decade. The bank’s 29 June 2026 statement on direct equity sets out both the scale and the strategic framing.
A Step Change in Direct Investing
The total deployed has climbed from £290m in October 2025 to over £600m today. The bank’s roster of direct equity-backed scale-ups has swelled from 31 in March 2025 to more than 50. The institution describes the move as a deliberate shift in gear, ramping up the pace and scale of direct equity investing to tackle longstanding gaps in the UK’s late-stage capital market. That market is the point at which promising UK firms have historically been forced to look to American or Asian investors, or to relocate altogether, to keep growing.
“We now have fuel in the tank and intend to put UK innovation in fifth gear,” said Leandros Kalisperas, the bank’s Chief Investment Officer. Kalisperas joined from the West Yorkshire Pension Fund in January 2025 and is the bank’s first-ever CIO. He framed the bank’s activity as a deliberate invitation to private capital. The bank has put its capital on the table. Pension funds and insurers sitting on the sidelines are the audience the move is built to bring in.
Supporting UK scale-ups is a national economic imperative. The UK excels at creating businesses, but our domestic capital base has yet to match our scientific excellence. Our activity should be interpreted as a clear signal to UK institutional capital that we want them to join us in backing UK scale-ups.
The ambition, in Kalisperas’s words, is to help the best of them scale up and stay put, a phrase he repeated in his first major statement since joining the bank in January 2025. Charlotte Lawrence, the bank’s Managing Director and Head of Direct Equity, ties the acceleration to a £400m-a-year target. “We are accelerating our ambitions to match the calibre of UK innovation,” she said. “By investing £400m per year into the most exciting venture-backed UK scale-ups across life sciences, deep tech, AI and fintech, we aim to act as an ecosystem multiplier and ensure the most innovative UK businesses have the capital and support to rapidly scale.”
The Numbers Behind the Acceleration
The pace has quickened materially over the past year. In the 2025/26 financial year, the bank completed 18 new investments alongside 18 follow-on deals, compared with 12 investments the year before. Total annual investment rose two and a half times, from £75m to £188m year-on-year.
- Direct equity deployed: £290m in October 2025 to over £600m in June 2026
- Portfolio scale-up count: 31 in March 2025 to more than 50 today
- FY25/26 deal activity: 18 new investments plus 18 follow-ons, up from 12 the prior year
- Annual investment: £75m to £188m year-on-year, a 2.5x rise
- Forward target: more than £400m of direct equity per year
That trajectory builds on the bank’s wider recovery. The British Business Bank returned to a £144m pre-tax profit in 2024/25 after two years of losses, giving it the balance-sheet firepower to write bigger cheques more often. The institution’s return to profit after two loss-making years is the back story to the larger cheque sizes now on the table. The shift is also a change of style: follow-on rounds, rarer earlier in the programme, are now as common as new positions.
Earlier in the direct equity programme, follow-on rounds were rarer. The change matters because follow-on cheques are how investors signal conviction to founders. Lawrence’s team has used the room to deepen positions in companies it backed in earlier rounds.
The bank expects to scale its annual deployment further this year, a projection that would mark another doubling of annual investment from the £188m FY25/26 outturn. The acceleration is targeted at a specific gap in the UK funding ladder: the rounds between roughly Series B and pre-IPO, where domestic capital has historically thinned out. The figure is the bank’s stated ambition, not a forecast; how close it gets will be visible in next year’s accounts. Lawrence has framed it as the operating pace the bank intends to maintain through the five-year plan.
Where the Money Is Going
Since its first direct equity investment into data analytics firm Quantexa in 2020, the bank has assembled a portfolio spanning the sectors policymakers and investors expect to define the UK economy over the coming decade. The sectors covered include life sciences, deeptech, advanced manufacturing, clean energy, defence, AI and fintech. The portfolio reflects where the bank sees the strongest pipeline of UK scale-ups needing late-stage domestic capital.
- Life sciences
- Deeptech, including advanced manufacturing
- Clean energy
- Defence
- Artificial intelligence
- Fintech
The bank’s framing is unflinchingly domestic. The acceleration is meant to keep high-growth UK firms anchored at home. Going overseas for late-stage capital is the outcome the bank is trying to head off. The risk in question is the one that has defined UK tech for two decades: founders who reach Series C or beyond often find that the cheques available in London can’t match the ones on offer in San Francisco in either size or speed. Closing that gap is the bank’s pitch to founders, their boards, and the institutional investors watching from the sidelines.
Cheque Sizes in the Five-Year Plan
Under the bank’s five-year strategic plan, the investment business is expected to deploy around £2bn per year into the UK venture capital ecosystem. Roughly 20%, or £400m, is earmarked for direct equity activity. That share translates into 14 to 18 new direct investments per year.
The model is built around sizeable individual cheques. Initial investments typically range from £10m to £40m, with long-term cumulative support reaching up to £75m per company. The structure is designed to give founders a single, dependable UK backer through the rounds where domestic capital has historically thinned out. The cumulative ceiling matters because it lets the bank keep backing a company through several later rounds without renegotiating. Few private funds can promise continuity at that scale.
The numbers reflect a different style of public development banking. Where the bank’s older programmes routed capital through venture funds, direct equity puts the institution alongside private investors on the cap table. It also exposes the bank more directly to the upside of the companies it backs, and to the risk if they don’t make it. The trade-off is deliberate: the bank is choosing closer exposure in exchange for stronger influence over outcomes.
Pension Capital Is the Bigger Target
The audience the bank most needs to move is the UK’s pension funds. UK workplace pensions hold over £2 trillion in assets, according to the UK government’s pension investment analysis, and the bank is using its own capital to try to draw that institutional money into UK scale-ups.
For decades, UK pension capital has allocated only a sliver of growth-stage money to domestic equity. Government data shows domestic investment by private sector defined contribution schemes has fallen from just over 50% in 2012 to just over 20% by 2023, the UK government’s pension investment analysis finds. The pattern has become a recurring theme in the UK’s scale-up debate. The bank isn’t alone in noticing; successive governments have tried to nudge pension money into UK growth, with mixed results. Lawrence has framed the bank’s role as drawing institutional capital into UK growth.
The bank frames its role as complementing private capital. Its own cheques are meant to draw more in. “Our activity should be interpreted as a clear signal to UK institutional capital,” Kalisperas said. The bank’s official announcement frames the move explicitly as an attempt to mobilise institutional capital at scale, with the public money meant to lead and the private money meant to follow.
Whether that thesis holds will depend, in large part, on whether UK pension funds choose to act. The bank has invested first. How much private capital follows will be visible in the bank’s next annual figures.
Government Backing Under the Industrial Strategy
The acceleration is being claimed politically as part of the government’s modern Industrial Strategy. Business Secretary Peter Kyle said the government was “ramping up the pace and scale of investment, backing the UK’s highest-growth scale-ups at a level not seen before, through our modern Industrial Strategy.” The aim, in Kyle’s framing, is “giving firms the firepower they need to stay and scale here in the UK and drive the economy.” Ministers are keen to claim the move, and to position the bank as proof the Industrial Strategy is delivering capital where it is needed. The framing also creates political exposure if the strategy doesn’t pay off.
The British Business Bank sits at the centre of a broader £6.6bn commitment to UK founders under the same Industrial Strategy umbrella, the bank’s wider UK founder commitment sets out. The direct equity push is a high-profile piece of that larger pledge. It’s the one ministers are most eager to associate themselves with.
Frequently Asked Questions
What is the British Business Bank?
The UK’s state-owned economic development bank, established in November 2014 and wholly owned by HM Government. It exists to fix gaps in the UK’s small-business finance market and currently supports £23bn of finance to almost 64,000 smaller businesses.
What does “direct equity” mean in this context?
The bank writes cheques directly into individual companies from its own balance sheet, rather than routing capital through a venture fund. Initial investments typically run from £10m to £40m, with cumulative support reaching as much as £75m per company over time.
How much is the bank committing annually under its five-year plan?
Around £2bn per year into the UK venture capital ecosystem overall, with approximately 20% earmarked for direct equity activity. That pace translates to 14 to 18 new direct investments per year.
Who actually funds the bank’s investments?
The bank is wholly owned by HM Government, with its investment capital drawn from the public balance sheet. The institution returned to a £144m pre-tax profit in 2024/25 after two years of losses, giving it room to write bigger cheques.
What does the bank want pension funds to do?
Allocate more of their growth-stage capital to UK scale-ups. UK workplace pensions hold over £2 trillion in assets, but only a sliver currently reaches domestic growth equity. The bank is using its own capital to try to draw the institutional money in.
