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British Patient Capital Response to Small Business Finance Markets 2024 report

Insights 01 March 2024

As this year’s report notes, there has been a clear turning point in the market. 2021 was an exceptional year with record levels of activity and high valuations, so while we saw a comparative decline in equity investment last year, the reality is that this is a market correction and sets the foundations for the next phase.

With £13.4bn of dry powder to invest as of the end of 2023, which is 58% more than at the same point in 2021, there is a clear opportunity. Firstly, the equity finance market has matured: the UK VC market is the third largest in the world and has evolved from being an early stage-focused market to one that can support companies at all stages. Most notably, follow-on deals made up 56% of the market, up from a third in 2014.

The opportunity is in using this dry powder and increasing maturity to address gaps in funding particularly R&D-intensive sectors, where groundbreaking ideas can eventually develop into innovative, commercialised products. Here, investment requires large pools of patient capital, and the UK market remains further from the global forefront. British Patient Capital’s Future Fund: Breakthrough programme was developed to address this, and just this week announced a £10 million investment in Curve Therapeutics, an innovative business pushing the boundaries of UK life sciences with its drug discovery platform. As Curve has demonstrated from its base in Southampton, there is huge potential outside of London, and we need to ensure investment continues to reach across the whole of the UK to build a strong ecosystem of innovation for the future.

Christine Hockley Managing Director for Funds, British Patient Capital

Further Information

Notes to editors

About British Patient Capital

British Patient Capital Limited is a wholly owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. Its mission is to enable long-term investment in innovative firms led by ambitious entrepreneurs who want to build large-scale businesses. Launched in June 2018, British Patient Capital has more than £3bn of assets under management, investing in venture and venture growth capital to support high growth potential innovative UK businesses in accessing the long-term financing they require to scale up. Find out more on British Patient Capital.

British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.

British Patient Capital makes commitments and invests on its own behalf and on behalf of third-party investors whose investments British Patient Capital manages.