British Business Bank makes £500 million diversity commitment
Today, the British Business Bank has announced a new £400 million Investor Pathways Capital initiative, which will support diverse and emerging fund managers across the economy and make it easier for new entrants, particularly those from underrepresented groups, to break into venture capital. The initiative, which will capture the value of a more inclusive investment ecosystem, is expected to launch in 2026.
The Investor Pathways Capital initiative will operate across three pillars. It will:
- Back more diverse fund managers through the British Business Bank’s Enterprise Capital Funds programme.
- Invest in microfunds to support small, early-stage funds.
- Back partners investing smaller amounts in talented individuals to build a track record, giving them the opportunity to become investors.
The initiative aims to reduce the significant gap in venture capital investment for underrepresented founders and investors due to industry biases, reliance on closed networks, and limited diversity among investors. It will target at least 50% of investment going to female fund managers.
Research shows that there is a correlation between female representation at venture capital firms and how much they invest in female-led businesses. Just 2p of every £1 invested in VC funding in the UK goes to female-founded businesses and only 13% of senior individuals on UK VC investment teams are women. The 2025 Investing in Women Code report has found that investing in female and ethnic minority-led businesses could add 13% to the value of the UK equity market, underscoring the importance of backing diverse founders.
Louis Taylor, Chief Executive Officer, British Business Bank, said:
To deliver the government’s growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter who they are or what their background is. This new £400m Investor Pathways Capital initiative will support diverse and emerging fund managers across the UK, in turn supporting talented entrepreneurs currently underserved by the UK equity market. It has the potential to unlock the UK’s full commercial potential and boost the UK economy.
Additional £50 million investment for the Invest in Women Taskforce
The Bank has already committed to supporting the aims of the Invest in Women Taskforce by investing £50 million into female-led funds through its existing programmes. The Bank will increase this commitment, investing a further £50 million into female-led funds that are aligned with the eight growth-driving sectors of the Industrial Strategy, taking its total commitment to £100 million, further expanding access to funding for female investors and entrepreneurs.
