‘Proof of concept’: Pathway Fund incubator graduates secure investment from British Business Bank
British Business Bank announces £90m commitment across 10 microfunds led by teams from diverse backgrounds, including three that received funding and support from Pathway Fund’s incubator programme.
Three diverse fund managers have secured a cornerstone investment from the British Business Bank, following their participation in Pathway Fund’s incubator programme, in a success described as a “proof of concept for a model that many doubted”.
Pathway Fund is a social investment wholesaler focused on Black and ethnically minoritised-led social enterprises. It provides grant capital for blended finance structures (where it can also be used as first-loss capital or guarantee) and programmes to support black and ethnically minoritised social entrepreneurs to access social investment.
Through Pathway Fund’s Fund Manager Incubator, Evertrue Capital, Future Impact Ventures and Blue Lake VC each benefited from £53,000 in working capital, in addition to six months of tailored support and introductions with potential investors.
They will now share a slice of £90m committed today by the British Business Bank to 10 new microfunds – with fund sizes ranging from £10m to £20m – led by teams from diverse backgrounds.
Asher Craig, CEO of Pathway Fund, said: “The fact that three of our incubator graduates have now secured institutional investment is not just a milestone for these organisations. It is proof of concept for a model that many doubted.
“There are still those who question whether the pipeline of diverse fund managers is deep enough, or whether the demand is real. Today answers that question.”
Future Impact Ventures are backing mission-driven entrepreneurs building inclusive climate solutions, towards an equitable net-zero transition. Blue Lake VC invests in immigrant founders in the UK, and Evertrue Capital is focused on backing founders at the earliest stages of development.
David Gilgur and Lyubov Guk, co-founders of Blue Lake VC (pictured top, right and centre), said: “We started Blue Lake VC because we could see how many exceptional international founders in the UK were being overlooked at the earliest stage, not because the ambition or quality wasn't there, but because the usual networks and pattern-matching weren't built for them.
“This commitment from the British Business Bank is a huge milestone for us and for the founders we want to back…We're excited to get on with the real work now: backing talented founders who are building important businesses and who deserve to be seen earlier.”
Institutional correction
The £90m commitment is the first investment under the microfunds segment of the British Business Bank’s £400m Investor Pathways Capital initiative, which aims to widen access to venture capital by backing first-time fund managers from a range of backgrounds, particularly those who have faced barriers to raising institutional capital. Exact investment amounts for each fund have not yet been disclosed.
Of the 10 fund managers selected – out of more than 150 applications – more than half are women, and 43% are from Black and ethnically minoritised backgrounds. In addition to the Pathway Fund graduates, they include: Common Ventures, Openseed VC, The Tech Bros Fund, Almanac Ventures, Firstdoor VC, Mustard Seed Fund and Twin Track Ventures. They will focus on providing seed and pre-seed investment to emerging businesses.
Today’s announcement is evidence that when you build that infrastructure well, institutional capital follows
Chancellor of the Exchequer, Rachel Reeves, welcomed the British Business Bank’s announcement. She said: “We have the right economic plan – backing the next generation of investors to spur growth and ensure businesses start, scale-up and expand across every part of the country.”
Reeves is expected to be replaced as Chancellor in the next few weeks, following the resignation of prime minister Keir Starmer and likely arrival of former Greater Manchester Mayor Andy Burnham in Number 10.
Lord Michael Hastings, chair of Pathway Fund, said: “Pathway Fund exists to open doors that have for too long been closed to Black and Ethnically Minoritised fund managers. What we have built is not simply a vehicle for deploying capital. It is a deliberate act of institutional correction.
“Today’s announcement is evidence that when you build that infrastructure well, institutional capital follows.”
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