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Interim Evaluation of British Patient Capital published

Insights 20 February 2023

Today, the British Business Bank has published an interim evaluation of British Patient Capital (BPC). The evaluation, delivered by SQW, finds that British Patient Capital has helped create up to 5,000 additional jobs across the UK, driven company growth, and fuelled innovation through its investments.

British Patient Capital’s mission is to enable long-term investment into innovative companies with the potential to build world-class businesses. We are delivering on that mission. The UK is a recognised hub for breakthrough research and development across a diversity of fields spanning deep tech to life sciences, but companies need patient capital to turn research into commercially-viable realities with the ambition to become significant players on the global stage. Catherine Lewis La Torre CEO, British Patient Capital

Highlights from the report include:

Supporting scale up Britain

  • A quarter (24%) of BPC-backed firms are identified as growth stage by Beauhurst, compared to 9% across all equity-backed companies.
  • On average beneficiary companies grew their employment by 55%, equivalent to c. 4,600-5,000 additional jobs, and demonstrated an increase in turnover between £4.7m and £5.4m per year.
  • The pre-money valuations of beneficiary companies were found on average to be £60m higher than they would have been in absence of the BPC-backed funding.

Backing innovation

  • Two thirds of surveyed BPC-backed firms said without the funding, company-level growth would not have occurred or would have taken longer to achieve, been smaller in scale or of lower quality
  • 83% of surveyed BPC-backed firms went on to commercialise new products, processes and practices.
  • 92% of surveyed BPC-backed firms are also using the equity investment to fund R&D, and BPC-backed firms are using a greater proportion of the equity investment to fund R&D than other equity backed firms.

Science superpower

  • 11% of BPC-backed companies are academic spinouts compared to just 2% of all equity-backed companies.
  • Just over half (52%) of the firms are also in the technology sector, including Artificial Intelligence and Fintech, supporting them to become the next unicorns and create an ecosystem to rival Silicon Valley.

Overall, the evidence suggests that BPC has made good progress against its objectives.

It has increased the supply of additional capital and enabled funds of greater scale, with a greater UK focus and that have been able to close more quickly.

Companies are better capitalised than they would have otherwise been and used BPC-backed finance to support innovation and growth. The findings suggest that BPC-backed investments are providing value for money for the taxpayer so far.