British Business Bank innovation funding is receiving a major uplift as the UK government commits £6.6B in new capital to fuel entrepreneurship and scale innovation across all regions of the UK. Announced on 23 June 2025 by the Secretary of State for the Department for Business and Trade, the new investment aims to transform how growth-stage capital reaches founders, startups, and innovation clusters as part of the UK’s modern Industrial Strategy.
The funding package includes a landmark £4B initiative named British Business Bank Industrial Strategy Growth Capital, set to deliver £16B of total investment when combined with approximately £12B in private capital. This initiative will target eight growth-driving sectors: advanced manufacturing, clean energy, creative industries, defence, digital technologies, financial services, life sciences, and professional and business services.
Unlocking innovation through British Business Bank targeted support
For founders struggling to find scale-up capital outside of London, the latest British Business Bank innovation funding offers new hope. The newly announced programmes are designed to address the systemic scale-up financing gap, and tailor support by sector. Entrepreneurs across the UK’s regions-especially in innovation-rich areas like Greater Manchester, Glasgow, and the West Midlands-stand to benefit from a more inclusive, flexible, and permanent capital base.
“This is a strong endorsement of the Bank’s 10-year track record, market access and capabilities, including our position as the largest investor in UK venture and venture growth capital funds and the most active late-stage investor in UK life sciences and deeptech,” said Louis Taylor, CEO of the British Business Bank.
Taylor added: “To deliver the government’s growth mission it is also critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter what their background or where they are located across the Nations and regions of the UK.”
Powering sectoral scale-ups and innovation clusters
British Business Bank Industrial Strategy Growth Capital will introduce more flexible investment models that address the unique needs of each growth sector. The strategy includes deploying up to £60M in individual investments, backing specialist VC funds, and supporting early-stage AI companies and strategic subsectors with high growth potential.
Beyond direct investment, the programme will also develop new specialist debt products to unlock additional private investment. Over time, these measures are expected to generate £30B in Gross Value Add (GVA) to the UK economy, signalling long-term economic benefits from enhanced innovation and productivity.
The Bank’s regional mission is equally ambitious. Of the £6.6B total commitment, £2.6B will be directed toward improving regional access to finance through new investment vehicles, cluster champions, and angel network expansion. This includes two new Nations and Regions Investment Funds-totalling £350M-dedicated to the East and Southeast of England, as well as £100M in targeted investment across existing regional funds.
British Business Bank goal: A more inclusive and resilient investment landscape
Alongside sector and regional strategies, inclusivity is a key focus. The British Business Bank will launch several initiatives to broaden access to capital for underrepresented groups and support new entrants into venture capital.
This includes the Angel Syndicate Support and Embracing Diversity programmes, aimed at increasing the diversity of angel investors and the founders they back. Additionally, a new Investor Pathway Capital programme will offer backing to emerging fund managers, helping to lower entry barriers and drive diversification across the UK’s investment ecosystem.
The wider capital increase follows the British Business Bank’s recent Spending Review settlement, which raised its total financial capacity to £25.6B. With this enhanced capability, the Bank expects to increase its annual investment activity by two-thirds, supporting up to £2.5B of new financing each year.
The permanent nature of this capital gives the Bank flexibility to reinvest returns over the long term, ensuring consistent support through economic cycles and reinforcing confidence in the UK’s innovation-led economy.
