UK-based venture investor Volution introduces its second fund with a $100M commitment designed to bridge financing gaps for scaling tech companies. The initiative builds on previous market observations and incorporates fresh strategies to support firms approaching global markets while offering an additional funding lifeline to high-performing businesses.
Various reports have acknowledged the strained funding environment for later-stage ventures. Some sources have detailed similar declines in Series A funding performance and noted that companies with early success now face challenges in transitioning to international scale, which has been consistently documented over recent fiscal cycles.
What challenges does the UK tech sector face?
The UK tech industry suffers from a notable decline in later-stage investment. Recent data indicates a 44 percent fall in Series A funding within the current year and a halved Series A to B conversion rate over five years. These trends spotlight structural issues where viable companies experience difficulties advancing beyond initial traction.
How will the new $100M fund support international growth?
Volution’s fund targets enterprises prepared for global expansion. It will supply the additional capital required by fintech, AI, and SaaS companies that currently have strong fundamentals but lack the necessary bridge finance to compete internationally.
The fund operates in partnership with Japan’s SBI Investment, a firm known for its strategic involvement in UK ventures, including investments in brands such as Zopa Bank. Initial allocations have already been made to a fintech and an AI company, indicating a targeted approach to boost scale-up capabilities at a critical juncture.
James Codling, Managing Partner at Volution, stated, “The UK has a huge challenge at the moment. The government is laser focused on productivity and growth but there is a fundamental structural funding challenge.”
Tomoyuki Nii, Director and Executive Officer for Overseas Investment at SBI Investment Co., remarked, “The UK is a global leader in FinTech and AI, with world-class universities, a strong regulatory environment, and a thriving entrepreneurial ecosystem. Our cornerstone commitment to Volution comes at a time when Japan and the UK government are strengthening economic ties to drive growth across both markets.”
The initiative aims to assist companies that have achieved substantial revenue and product-market fit. By providing necessary financial support at the inflection point before international scaling, the fund seeks to offer an effective solution to growing companies that risk being left behind by traditional venture financing mechanisms.
Industry observers note that focused capital injections during later-stage growth phases could help maintain the country’s vibrant tech pipeline and better align domestic investments with government strategies. This focused capital backing, combined with strategic experience, provides practical benefits for companies navigating the competitive global market.
