The British Business Bank has announced a commitment of up to £150 million to support a new scale-up fund focused on the North of England. The proposed fund will target high-growth businesses seeking larger investments to accelerate their expansion. It is expected to provide capital of between £5 million and £15 million per investment, complementing existing regional programmes.
Addressing the Scale-Up Gap
The fund aims to close regional equity gaps by serving innovative companies from Liverpool to Newcastle and from Manchester to Sheffield. It will support university spinouts and ambitious firms operating in sectors such as clean energy, creative industries, and space technology. The initiative is intended to help these businesses attract the growth capital they need to remain competitive.
Complementing the Northern Powerhouse Investment Fund II
The new fund will operate alongside the British Business Bank's existing Northern Powerhouse Investment Fund II, which currently supports smaller businesses with investments of up to £5 million. By offering larger commitments between £5 million and £15 million, the fund addresses a gap for companies that have outgrown earlier-stage support. This layered approach is designed to strengthen the funding pipeline across the North.
Mobilising Private Capital
The British Business Bank intends for the fund to attract additional private capital behind the most innovative high-growth northern firms. This co-investment model is expected to broaden the pool of investors backing regional scale-ups. It also reflects a wider effort to increase access to finance for businesses across the UK.
Sector Strengths and Regional Ambitions
The fund's investment strategy will reflect the sector strengths of the covered geography, including clean energy and creative industries. It is expected to back companies with the potential to scale and contribute to regional economic growth. This focus aligns with national priorities around innovation and place-based investment.
Leadership Commentary
In remarks expected on 7 September, the Chancellor of the Exchequer described the allocation as a £150 million effort to lever more capital behind fast-growing firms in the North of England. Leandros Kalisperas, Chief Investment Officer at the British Business Bank, said the proposed fund would provide an important new source of scale-up capital. He noted that it builds on the success of the Northern Powerhouse Investment Fund II.
Wider UK Access to Finance
The announcement follows the Bank's wider commitment to increasing access to finance for businesses across the United Kingdom. It coincides with the launch of the £210 million South East Investment Fund in Brighton, which brings together regional stakeholders. Both programmes highlight a place-based approach to addressing regional funding imbalances and supporting local growth.
Expected Market Impact
The fund is expected to make investments of between £5 million and £15 million, positioning it between early-stage venture capital and larger institutional growth capital. This range allows the British Business Bank to support companies that require substantial capital but are not yet suited to mainstream private equity. It could help retain fast-growing firms in the region and create new employment opportunities.
The proposed Northern scale-up fund represents a significant public commitment to unlocking growth outside London and the South East. If successful, it could encourage more private investors to back ambitious northern firms and strengthen the regional innovation ecosystem. The initiative's long-term value will depend on effective deployment and its ability to catalyse sustained private investment.