- The British Business Bank has committed a further £10 million to SFC Capital under the Regional Angels Programme, taking its total backing to £35 million across four tranches.
- SFC’s first £10 million tranche, deployed since 2020, has already returned more than £1 million in realised cash, alongside a 10-15% portfolio write-off rate.
- Between 70% and 80% of SFC’s Regional Angels capital goes to companies outside London and the Southeast, spanning all 12 UK regions.
The British Business Bank has just backed SFC Capital with a further £10 million, and the early-stage investor says the numbers behind its past deals justify the confidence.
Ryft, a payments platform backed through SFC’s Regional Angels portfolio, delivered a 6.2x return for early investors. Peopleforce, an HR software company in the same portfolio, returned more than five times its backers’ money. But the number Joseph Zipfel, chief investment officer at SFC Capital, is most proud of is smaller and less flashy: SFC’s original £10 million tranche from the British Business Bank, deployed back in 2020, has already returned more than £1 million in realised cash, with the fund still five to six years into a typical early-stage holding period.
“The total value to be paid in multiple was correct, and a million pounds in cash return is pretty good,” Zipfel tells Tech Funding News. He says the fund is outperforming the average UK venture capital firm, though SFC did not share a comparable benchmark figure
This is the British Business Bank‘s fourth and largest single commitment under the Regional Angels Programme to date, bringing total support to £35 million since the partnership began. SFC Capital is a UK early-stage investor with over 600 portfolio companies and more than £180 million under management.
Looking beyond the claim of “more than half outside London”
The Regional Angels Programme, run by the British Business Bank, aims to spread early-stage equity finance beyond London and the Southeast, where most UK angel activity is concentrated.
“Between 70% and 80% of SFC’s Regional Angels capital is invested outside London and the Southeast, reaching all twelve UK regions,” says Zipfel to Tech Funding News.
He credits SFC’s success to its links with university spinout networks, which often focus on areas like robotics and space research in Bristol or life sciences in Manchester.
“We’re completely generalist, so working with those universities has been a great source of deal flow and very diverse. SFC is kind of like a proxy, an index almost, for the UK tech ecosystem,” Zipfel says.
Returns and associated write-offs
SFC has fully invested its first £25 million, supporting over 260 early-stage businesses through its SEIS and EIS funds and its angel network. Early cohorts from 2020 to 2022 are posting a total value to paid-in multiples of two.
Two exits anchor that figure: Peopleforce, an HR software company acquired by a European recruitment technology firm, returned more than five times the original investment, while payments platform Ryft delivered a partial secondary exit of up to 6.2x for early backers.
Those wins sit against a portfolio-wide write-off rate of 10-15%, slightly higher in the oldest 2020 cohort. “It’s really in line with the sort of typical failure rate that you would expect in a startup portfolio. What really matters is that we have the winners that make up for it multiple times,” Zipfel says.
The new £10 million is expected to back around 100 more companies, at an average cheque size of roughly £100,000, pushing SFC’s Regional Angels total past 350 businesses. That average masks a deliberate skew: cheque size increases for regional companies and for deals that include angel co-investors, a combination Zipfel correlates with stronger returns.
“When a regional company is attracting angel investors, it’s actually more likely to produce good returns down the line,” he says.
How SFC selects companies and allocates capital
SFC invests only at pre-seed from its SEIS fund, reserving its EIS fund for follow-on into existing portfolio companies. Diligence weighs founder dynamics as heavily as commercial opportunity: team chemistry, skillset balance, and whether the founders have the right circumstances to survive the grind of building a business, Zipfel says.
The fund is deliberately sector-agnostic. Roughly 20% of its investments sit in life sciences and deep tech, fintech remains a consistent focus, and around 10-15% go to consumer brands — a category Zipfel argues counts as innovation even without a technology core.
Structurally, the Bank’s £35 million isn’t an equity stake in SFC itself. It’s a co-investment vehicle that SFC manages on the Bank’s behalf, investing on the same terms as SFC’s own SEIS and EIS funds in every deal.
“The British Business Bank effectively has a portfolio of 250-plus startup equity investments,” Zipfel says, without the SEIS or EIS tax relief available to SFC’s private investors.
Mark Barry, senior director at the British Business Bank, says the new commitment is “put to work to address imbalances in access to early-stage finance across the UK,” building on SFC’s record with high-growth businesses across the country.
What does this signal for UK founders
Zipfel is positive about UK funding from pre-seed to Series B, which he thinks is well supported by the local ecosystem. After this stage, some of SFC’s best companies have raised later rounds from US investors. He sees this as a natural move toward global growth, not a sign of a funding gap.
He draws a sharper contrast between public and private capital. Unlike other European markets, where Zipfel says public bodies play a larger, more active role in the startup ecosystem, he argues that the UK benefits from a deeper bench of private fund managers such as SFC, with programmes such as Regional Angels acting as a catalyst rather than a substitute for private capital.
“It’s better to have the private sector leading on that. At the end of the day, it will also come from delivering returns, delivering good stories, and that will attract more money to the UK ecosystem,” he says.
The UK’s angel base has grown 54% since 2022, from 36,800 to 56,800 active investors, according to the UK Business Angels Association, a backdrop that makes government-backed schemes like Regional Angels an increasingly important bridge between pre-seed capital and the institutional funding that typically starts at Series A.
The main question is whether SFC’s returns stem from a repeatable model or from just five years of favourable market conditions. With four tranches and £35 million invested, both SFC and the Bank are betting on the model. The next tranche will show whether regional, university-linked deal flow can keep delivering venture-style returns at about 100 companies per year, rather than just spreading capital more evenly.
