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Episode 1 raises new £60m fund from British Business Bank’s Enterprise Capital Funds programme to invest in UK seed companies

Press release 01 December 2017

  • Ex-Amazon UK CEO raises second early stage tech fund of £60m
  • Fund is oversubscribed, and 60% bigger than Episode 1’s first fund

Episode 1, the backer of successful companies like Carwow, Triptease & AimBrain, today announces the closure of its second UK seed-to-Series A fund, raised to help passionate teams turn innovative insight into scalable operations. It leads rounds of £500k to £2m into teams with real insight into markets that are emerging or evolving.

The fund is a £60m Enterprise Capital Fund (ECF), raised with the support of the British Business Bank, the UK government’s economic development bank. As the largest UK-based investor in UK venture capital, the bank seeks to unlock the innovative potential of Britain’s small and medium sized enterprises.

The new fund is 60% bigger than the Episode 1’s first ECF, and oversubscribed, despite relatively tough economic times.

There is no shortage of funds for the best entrepreneurs, but in our experience much of it is undifferentiated – there are few investors with the commitment to roll up their sleeves and get on with the heavy lifting that turns innovation into operations We realise that for companies at this stage, the next handful of decisions they make are potentially transformational – and we plan to be there to help. Paul McNabb co-Managing Partner of Episode 1
There is an enormous amount of experience at Episode 1. Whether that’s leadership positions at Amazon, Cisco or Elektra – or indeed starting and exiting their own companies – there are few funds at our stage that can offer this range and depth of experience. If I were to be a founder again, this experience is what I would be looking for. Simon Murdoch Episode 1 Founding Partner

As an early stage fund, Episode 1 see thousands of business plans per year and invest where they see the best opportunities, but are particularly interested in how emerging ‘deep technologies’ such as AI are disrupting all industries and how technology is reinventing markets.

We’re very happy to be investing once again in Episode 1, providing £36m of investment to their new fund. This is our 26th such commitment under our ECF programme, which now has a total investment capacity approaching £1.1bn. It is encouraging that the team was able to launch a significantly bigger fund with a bolder ambition, showing there is a quality of opportunity out there in the UK market for such investment Ken Cooper Managing Director, Venture Solutions at the British Business Bank

In addition to the British Business Bank and a long list of private investors including many well-known entrepreneurs, several new institutions including Draper Esprit and ADV joined the ranks of the fund’s LPs.

Episode 1 are one of Europe’s leading seed funds, backing some of its biggest successes. As the number of new start-ups continues to increase, experienced operators like Episode 1 are needed to bridge the gap to the next round of institutional funding, and we are excited to partner with them on the next stage of their growth Simon Cook DE
By providing targeted support and smart capital at this pivotal stage of the lifecycle Episode 1 has built a strong reputation as a discerning investor and is rapidly becoming a top tier Seed to Series A VC. Fund 2 is a terrific next step and we’re really excited to be part of this journey Keith Teare Executive Chairman of ADV

Further Information

Notes to editors

About Episode 1

Episode1 Ventures is a software­ only venture capital firm that invests £250k to £1.5m in early ­stage, revenue ­generating startups and plays an active and supportive role in turning them into growth businesses. With experience of startups from the inside, it provides frank and fast feedback to founders as well as strong entrepreneurial ‘know­how’ and a passion for building successful businesses.

With 20+ years of experience investing in software businesses, its partners have made early investments in some of the UK’s best known success stories including Betfair, LoveFilm, Natural Motion, ScanSafe, Shazam, Shutl, and Zoopla.

Founded in 2013 and based in London, the firm has built a great portfolio of software businesses including CarWow, TouchSurgery, TripTease, Global App Testing, AimBrain and CloudNC.

For more information visit episode1.com.

About the British Business Bank

The British Business Bank is the UK’s national economic development bank.  Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Our remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

British Business Bank programmes are supporting £3.4bn of finance to over 59,000 smaller businesses, and participating in a further £5.8bn of finance to 86 mid-cap businesses (as at March 2017).

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options, including early stage VC, available to smaller businesses.

British Business Bank plc is a limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield S1 2GQ.

As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.

British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.

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