British Business Bank commits up to £35 million to Episode 1 Fund IV
Press release
The British Business Bank has made a commitment of up to £35 million to Episode 1’s Fund IV. The commitment follows the Bank’s previous investments into Episode 1’s 2014 vintage Fund I, 2018 Fund II, and 2022 Fund III.
Episode 1 is an investor backing early stage companies, primarily at the pre-seed and seed stages. It takes an algorithmic approach to finding and evaluating software-driven UK companies with a specific focus on AI, Software Infrastructure, Deep Tech and Tech Bio.
Episode 1’s strategy demonstrates strong alignment with the UK’s Industrial Strategy sectors, with a significant majority of the Fund III portfolio mapping to five of the eight priority sectors - digital and technology, financial services, professional and business services, clean energy, and life sciences. Fund IV will continue to largely back businesses within the Industrial Strategy sectors.
The British Business Bank is the largest investor in UK venture and venture growth capital funds. By making cornerstone commitments, the Bank helps funds achieve a first close and provides a strong signal of confidence that helps to mobilise additional private sector capital. The Bank has also committed capital within its Five-Year Strategic Plan to prioritise deployment to Industrial Strategy sectors.
Christine Hockley, Managing Director and Co-Head of Funds, at British Business Bank said:
Our fund investments are designed to increase the availability of capital for innovative UK businesses, allowing them to start, scale and stay in the UK. By making a cornerstone commitment to Episode 1’s Fund IV, we are expanding the pool of capital available to support high growth, high return innovative businesses.
Michael Laycock, Investment Director, Funds, British Business Bank said:
Episode 1 has a strong track record of backing early stage UK businesses with strong growth potential. Fund IV represents the fourth Episode 1 fund that we have backed and we are pleased to continue our support. Fund IV will continue to make a substantial impact supporting primarily UK based businesses operating in the Industrial Strategy sectors, further fuelling UK economic growth, by supporting promising UK businesses to scale.
Adam Shuaib, GP at Episode 1 said:
British Business Bank's backing is a huge vote of confidence in what our team has built over the last decade; an early-stage fund combining proprietary algorithmic sourcing with a rigorous behavioural approach to founder selection to find incredible companies like Lawhive, Carwow, Mantic and Source.dev before others get there.
Hector Mason, GP at Episode 1 said:
Securing backing from one of Europe's most respected institutional investors is a strong signal that the thesis we've been refining over the past decade is resonating at the highest levels.
Further Information
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Notes to editors
About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank’s core programmes support £23bnRead footnote text
1
of finance to almost 64,000Read footnote text
2
smaller businesses.
British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. With the exception of BBB Investment Services Limited they are not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority. BBB Investment Services Limited is authorised and regulated by the Financial Conduct Authority. A complete legal structure chart for the group can be found at british-business-bank.co.uk.
The above transaction is operated by British Patient Capital Limited, a wholly owned commercial subsidiary of British Business Bank plc.
British Patient Capital Limited is registered in England and Wales with company number 11271076, and registered office at Steel City House, West Street, Sheffield, S1 2GQ. British Patient Capital makes commitments and invests on its own behalf and on behalf of third-party investors whose investments British Patient Capital manages.
The transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK government, the British Business Bank plc, its subsidiaries or any other party in respect of Episode 1 or its products or services.
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1
Figures as at end March 2025
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Figures as at end March 2025, does not include Start Up Loans
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