Britain’s technology sector is getting a fresh injection of late stage capital as venture investor Molten Ventures launches a new fund aimed at helping promising UK and European startups make the difficult transition from early growth to global scale. Molten has secured a £175 million first close for its new Growth Fund, with the British Business Bank providing a £75 million cornerstone commitment.
Molten Ventures has committed the remaining £100 million of the first close and is targeting a final fund size of £350 million. The fund will focus on Series B and later investments in high growth technology companies across the UK and Europe, particularly businesses operating in areas including artificial intelligence, space, fintech, quantum computing, deeptech and hardware.
Closing the Scale Up Gap
The new fund is designed to address a long standing challenge in the UK technology ecosystem, the shortage of sufficiently large pools of domestic capital available to companies once they move beyond early stage venture funding.
Molten said the Growth Fund will provide additional institutional capital to businesses moving from early growth into later stage scale up. The firm believes many ambitious UK and European technology companies have strong potential but need larger rounds and longer term backing to compete internationally.
The British Business Bank said its commitment is part of a wider effort to create deeper pools of late stage capital for breakthrough technology companies and help more UK businesses scale into global companies.
£75 Million Cornerstone Investment
The British Business Bank’s £75 million commitment is designed to help Molten attract additional institutional investors as it works toward the £350 million target.
Molten and the British Business Bank have had a relationship since 2018. During that period, the Bank has invested alongside Molten in several UK technology businesses, including SatVu, Thought Machine, Paragraf, Form3, Hadean and IMU Biosciences.
The new commitment also reflects a broader strategy by the British Business Bank to use cornerstone investments to encourage private institutional capital into UK venture and growth funds.
Focus on High Growth Technology
The Growth Fund will continue Molten’s established Series B plus investment strategy. The firm has completed more than 40 growth profile deals and invested over £700 million in the past decade.
Its investment focus will cover several technology sectors viewed as strategically important for the future of the UK and European economies. These include AI, space, fintech, quantum technologies, deeptech and hardware.
The fund is expected to allow Molten to build larger positions in companies with significant international ambitions while providing entrepreneurs with the capital required to expand their teams, enter new markets and develop their technology.
Building Global Companies
Ben Wilkinson, CEO of Molten Ventures, said the British Business Bank’s participation represents a strong endorsement of the firm’s strategy and highlighted the need for more long term institutional capital in venture and growth investing.
Molten currently manages more than £2 billion in assets across its group and has deployed more than £1 billion since 2016. Its portfolio and investment history includes companies such as Revolut, Wise, Trustpilot and UiPath.
The new Growth Fund gives Molten another vehicle through which it can deploy capital as its existing portfolio companies and the wider European technology market mature.
A Broader Capital Strategy
The fund also forms part of Molten’s broader strategy of attracting more third party institutional capital alongside its listed investment platform. The firm has recently expanded its activities into areas including secondaries, giving investors additional ways to access private technology companies.
For UK founders, the new fund could provide an alternative to relying heavily on overseas investors during later funding rounds. Molten believes increasing the supply of domestic growth capital can help more technology companies remain rooted in the UK while expanding globally.
With £175 million already secured and a £350 million final target, Molten Ventures is now looking to turn its latest fund into a larger source of growth capital for the next generation of European technology companies.