Artificial intelligence is increasingly moving beyond software and into real-world industries such as manufacturing, energy, and construction. As companies look for ways to automate physical infrastructure, investors are increasingly focusing on startups building AI systems that operate in the physical world.
London-based venture capital firm SuperSeed has launched Fund III, a seed-stage fund focused on “Physical AI” startups. The fund has secured a cornerstone commitment of up to £50 million from the British Business Bank, which invested through its Enterprise Capital Funds programme.
Christine Hockley, Managing Director and Co-Head of Funds, British Business Bank, said: “SuperSeed has a strong track record of identifying innovators and a deep understanding of how AI can be applied to sectors of national strategic importance, including those of the modern Industrial Strategy. This cornerstone commitment will crowd in additional private capital, backing innovative companies developing applied physical AI systems that drive and optimise efficiencies in critical business infrastructure.”
Artificial intelligence is increasingly moving beyond software and into real-world industries such as manufacturing, energy, and construction.
As companies look for ways to automate physical infrastructure, investors are starting to focus on startups building AI systems that operate in the physical world.
London-based venture capital firm SuperSeed has launched Fund III, a seed-stage fund focused on “Physical AI” startups.
The fund has secured a cornerstone commitment of up to £50 million from the British Business Bank, which invested through its Enterprise Capital Funds programme.
Christine Hockley, Managing Director and Co-Head of Funds, British Business Bank, said: “SuperSeed has a strong track record of identifying innovators and a deep understanding of how AI can be applied to sectors of national strategic importance, including those of the modern Industrial Strategy. This cornerstone commitment will crowd in additional private capital, backing innovative companies developing applied physical AI systems that drive and optimise efficiencies in critical business infrastructure.”
Growing interest in physical AI
Founded in 2018 by Mads Jensen and Dan Bowyer, both former technology company founders, SuperSeed is a seed-stage venture capital firm.
The firm invests in Physical AI — artificial intelligence applied to physical industries.
SuperSeed has backed 38 companies across two funds, and lead investments in companies like Hive Autonomy, OctaiPipe, Ai Build and All3
The British Business Bank said the new fund supports its broader goal of strengthening technological capabilities in sectors important for long-term economic growth.
Mark Sims, Senior Director, Funds, British Business Bank, said: “SuperSeed’s focus on Physical AI aligns strongly with our ambition to strengthen technological capability in sectors that are central to future economic growth. Following our earlier commitment to SuperSeed’s Fund II in 2022, we are pleased to continue our support for SuperSeed as it backs founders turning advanced AI into real-world impact across the UK economy.”
Focus on AI for real-world industries
SuperSeed’s new fund will invest in early-stage companies building AI technologies for sectors such as manufacturing, energy systems, construction, and autonomous infrastructure.
These startups typically develop the software platforms, algorithms, and control systems that allow industrial machines and infrastructure to operate more intelligently. Some also build integrated hardware alongside the software.
The fund will support companies across the full technology stack of physical AI.
The British Business Bank is the largest investor in UK venture and growth capital funds. Its cornerstone commitments often help venture funds achieve their first close and attract additional private investment.
Through the Enterprise Capital Funds programme, the Bank aims to increase the amount of equity funding available to early-stage companies in the UK.
So far, the programme has supported 52 venture funds, representing more than £2.7 billion in capital.
Mads Jensen, Managing Partner at SuperSeed, said: “The companies we back are deploying AI into manufacturing lines, energy infrastructure, and construction sites, sectors where the UK has genuine industrial strength and strategic interest. Two years ago most of these were pilots. Today, they are live production systems with paying enterprise customers. That transition is what Physical AI means in practice, and it is why the British Business Bank has returned as our cornerstone investor for a second fund.”
