21SEP

Business Bank backs a €1bn growth fund

1 min read

16:52UTC

The British Business Bank committed €65m to Highland Europe's sixth fund on 30 July, buying a limited-partner slot rather than writing a cheque into a company.

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Key takeaway

The Bank bought a limited-partner slot in a €1bn growth fund rather than picking companies itself.

The British Business Bank committed €65m to Highland Europe's Technology Growth Fund VI on 30 July, a vehicle above €1bn targeting companies from Series B to pre-IPO ¹. Highland Europe has raised €3.75bn across six funds, backed more than 80 companies and seen 30 exits. The Bank is the UK's state-owned development bank; Highland Europe is a private growth-equity firm with offices in London and Geneva, and the two have already sat on the same cap table at the data company 9fin, which Christine Hockley, who runs the Bank's commercial equity funds, cited when the commitment was announced.

The commitment is a limited-partner position, not a direct investment. The Bank does not choose which companies Highland Europe backs, does not price the rounds and does not sit on the boards. What it buys instead is a claim on a fund big enough to lead the growth rounds that British companies have historically flown to New York or Silicon Valley to raise. The trade-off is control: every pound committed this way is a pound the Bank cannot aim at a specific gap it has identified.

This is the second such position in five weeks. The Bank put £10m into Odyssey Ventures' transatlantic seed fund in July , at the opposite end of the stage range. Between a seed fund and a pre-IPO growth vehicle, the Bank now has fund-of-funds exposure across almost the whole ladder, built from commitments rather than from picks.

Deep Analysis

In plain English

The British Business Bank, the UK government's economic development bank, committed €65m to a fund run by Highland Europe, a venture firm that invests in later-stage tech companies, from Series B through to just before a company goes public. Highland Europe's fund is aiming to raise more than €1bn in total. This is a fund-of-funds move: rather than picking individual companies itself, the Bank is trusting Highland Europe's team to pick winners on its behalf. Highland Europe has raised €3.75bn across six funds before this one, backed more than 80 companies, and seen 30 of them exit successfully. Christine Hockley, who runs the Bank's commercial equity funds, pointed to an existing shared investment with Highland Europe in the data company 9fin as a reason for the relationship.

What could happen next?

Meaning
The Bank is using a fund-of-funds route into Highland Europe's Series B to pre-IPO vehicle rather than backing individual growth-stage companies directly.

Sources:British Business Bank

Mentions:British Business Bank →Highland Europe →9fin →New York →London →Geneva →Odyssey →Odyssey Ventures →

First Reported In

Update #14 · UKRI's sponsor department no longer exists

British Business Bank· 24 Aug 2026

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Causes and effects

This Event

Business Bank backs a €1bn growth fund

A state development bank set up to invest directly is increasingly buying exposure through other people's funds, which changes who picks the companies.

Led to

Scotland gets its own CDFI cheque

The same Bank widened its activity from a fund commitment to doubling a direct SME facility three weeks later.

Occurred 20 Aug 2026

Read story →

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