The British Business Bank has committed up to £100m to private equity group Hermes GPE to back growing tech firms in the UK and across Europe.
The bank said the cash will target “later-stage opportunities in technology-enabled businesses across the UK and Europe with a productivity, people or sustainability theme”.
It added the investment came through its British Business Investments arm, a commercial subsidiary of the bank launched last year.
The British Business Bank was established by the Coalition government in 2014, and supports more than 90,000 small businesses with over £7bn of loans or investments through various programmes.
The bank has invested four tech firms that have hit unicorn status, meaning private companies valued at over $1bn. These are digital bank Revolut, currency firm Transferwise, virtual reality business Improbable and artificial intelligence-related computer chips company Graphcore.
British Business Investments will use the cash to back young tech firms through London-based venture capital firm Hermes, which has a 27-year record of investments and buyouts around the globe. The unit added the capital comes from its £500m Managed Funds Programme.
The backing from the government-backed body is the cornerstone of Hermes new Innovation Fund, which is targeting a total of £250m of capital, with the rest coming from private investors.
British Business Investments chief executive Catherine Lewis La Torre (pictured) said: “Hermes GPE is a long-term investor with a strong UK heritage and well-established growth capital investment capability. This commitment from our Managed Funds Programme will provide a steady stream of capital to innovative businesses across the UK looking to scale-up.’’