Jessica O'ConnorThe Government has announced a £500m investment package aimed at increasing access to finance for underrepresented entrepreneurs and fund managers.
The initiative, part of the Government’s broader “Plan for Change,” has been designed to help individuals from diverse backgrounds establish themselves in the venture capital sector and grow the next generation of UK businesses.
The main tranche of the funding, a £400m package from the British Business Bank, will begin in 2026.
It is focused on supporting women, ethnic minorities, people with disabilities, and those from deprived backgrounds who often face barriers in accessing investment opportunities.
The initiative will fund diverse managers directly, invest in micro-funds with capital of £10m to £15m, and support partner organisations to train and seed talented individuals who lack personal wealth or industry connections.
A further £50m has been allocated to support female-led venture capital funds, doubling the British Business Bank’s existing commitment to £100m.
The Chancellor of the Exchequer, Rachel Reeves, said: “This is exactly what our Plan for Change is about: breaking down barriers to opportunity and kickstarting the growth that creates jobs and puts money into people’s pockets across the UK.
“This £500m investment will back diverse and emerging fund managers, making our economy stronger and more dynamic.”
Louis Taylor CBE, chief executive officer of the 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.
“The UK equity market currently experiences a significant funding gap for diverse founders, negatively impacting their ability to start a business.
“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.”
Minister for Investment, Baroness Gustafsson CBE, acknowledged the milestone while emphasising the need for continued action.
She said: “Women entrepreneurs have so much to contribute to economic growth, so it is encouraging to see progress in this year’s Code, with more female-led teams receiving investment than male for the first time.
“Our Plan for Change is about boosting growth further and that’s why we’re taking action today to support high-potential female-led funds with an extra £50m of funding.”
