1MAY

Forest closes £40m for London e-bike push

2 min read

14:35UTC

Forest closed a £40m Series B on Wednesday 29 April for London e-bike expansion: £30m of equity from B8 Venture Partners, Fen Ventures and Güil Mobility Ventures, £10m of asset-backed debt from Fintex Capital, and a minority stake from hardware supplier OKAI.

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Key takeaway

Forest closed £40m on 29 April with mobility VCs, £10m Fintex debt and an OKAI minority stake.

Forest closed a £40 million Series B on 29 April 2026 for London e-bike expansion ¹. B8 Venture Partners, Fen Ventures and Güil Mobility Ventures wrote the equity tranche; Fintex Capital provided £10 million of asset-backed debt; hardware supplier OKAI took a minority stake. The company has 1.5 million users and operates in 18 London boroughs, having recently won the sole-operator contract in Richmond.

The round translates to roughly 18 boroughs of London e-bike infrastructure backed entirely without retail-investor capital. Venture Capital Trust networks, the listed funds that channel small-investor money into early-stage UK companies, are absent from the CAP table. The VCT tax relief move from 30% to 20% in early April removed the retail seed and growth pool that once would have anchored a round of this size; growth-stage replacements are now visible.

Fintex Capital's £10m asset-backed tranche carries the structural weight. Mobility hardware spend, the bikes, batteries and docking stations, can be financed against the asset rather than from equity, which lowers founder dilution while letting Fintex secure repayment against a tangible fleet. OKAI's minority stake aligns the supplier and operator on hardware roadmap, the equivalent of a strategic investor lock-in. Specialist mobility funds writing the equity makes sense for the same reason: B8, Fen and Güil all hold mobility portfolios that benefit from co-investment exposure.

Forest's contract wins also matter. Sole-operator licences in London boroughs are fixed-term franchise instruments; lose them at renewal and the asset base evaporates. Q1 2026 brought £7.8bn into UK venture capital and that liquidity is showing up at the £40m tier. The £500k to £2m tier where most university spinouts raise has not been replaced; this is the deal shape the post-VCT-cut middle of the market produces.

Deep Analysis

In plain English

Forest is a London company that operates electric bikes you can hire by the minute via a smartphone app. Unlike the old-style Boris Bikes locked to docking stations, Forest's bikes can be left anywhere within a defined area and found via GPS. The £40m raised on 29 April will fund expansion across more of London. The money comes from a mix of sources: venture capital firms took equity stakes, a lender provided debt secured against the value of the physical bikes, and the Chinese manufacturer that makes the bikes also took a small ownership stake in the company. At 1.5 million users across 18 boroughs, Forest is already one of the largest shared micromobility operators in Britain. The new funding targets the boroughs not yet covered.

Deep Analysis

Root Causes

London's shared micromobility market consolidated faster than most European cities for two reasons.

First, Transport for London's borough-by-borough licensing system, introduced after the unlicensed dockless bike scatter of 2017-18, requires operators to demonstrate insurance, geofencing, and borough-specific parking enforcement. This compliance overhead eliminated most smaller operators by 2022, leaving a high-entry-barrier market where only well-capitalised players could compete. Forest's 18-borough coverage is itself a regulatory achievement.

Second, post-pandemic commuting patterns in London shifted toward short-distance mixed-mode trips (tube plus bike, bus plus bike) at precisely the moment when e-bike battery technology crossed the 40km range threshold that makes a zone-2-to-zone-1 commute practical on a shared bike.

Source Landscape

This story draws on centre-left-leaning sources from United States

United States

The £40m split three ways: equity (£30m from three VCs), debt (£10m asset-backed from Fintex Capital), and hardware stake (OKAI's minority equity position). The debt-equity blend is unusual at Series B and reflects the capital-intensive nature of shared e-bike fleets: each bike costs roughly £800-£1,200, meaning 1,000 bikes requires £800,000-£1.2m in hardware capital before a single ride is taken.

OKAI's minority equity stake creates a vertically integrated supply relationship. If OKAI manufactures Forest's hardware at cost-plus, and holds equity in Forest's upside, the effective hardware subsidy functions as a product-market-fit bet. This structure is comparable to how Chinese CATL took equity positions in EV manufacturers to secure battery supply contracts at scale.

Sources:CNBC

Mentions:Forest →B8 Venture Partners →Index Ventures →Güil Mobility Ventures →Fintex Capital →OKAI →Venture Capital Trusts →

First Reported In

Update #3 · SAIU rides $1.1bn Ineffable seed; hardware looms

CNBC· 1 May 2026

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Different Perspectives

Beauhurst / UK startup data analysts

Five sub-£50m rounds closed in nine days with zero VCT-backed angel networks on any cap table, confirming the post-cut investor map is forming fast in the £4m–£40m band. The gap is structural: 36.7% of university spinouts raised below £500,000 in 2025, a tier neither the SAIU nor the BBB direct mandate touches.

BVCA / UK VC industry body

The post-VCT investor map has sorted into three non-overlapping pools with no ladder between them; the £500k–£2m band VCTs historically anchored now has no obvious replacement. Beauhurst data showing 36.7% of spinout fundraisings below £500,000 in 2025 suggests the pipeline narrows at the base, compounding within three to five years.

European Commission / EU industrial policy observers

The EC approved €211m of Italian state aid for CamGraPhIC in the same week Britain named five AI hardware startups without specifying a capital instrument. Brussels' willingness to write an industrial-scale factory cheque contrasts with London's pre-announcement of a plan whose mechanism remains unspecified until June.

Sequoia Capital / Lightspeed Venture Partners

Sequoia and Lightspeed co-led Ineffable's $1.1bn seed on research credibility alone, with no product and no revenue; the SAIU minority stake followed their commitment. For US growth funds, the sovereign validator reduces political risk and accelerates LP approval for non-revenue European bets.

HM Treasury / DSIT

DSIT withheld the SAIU cheque size as commercially sensitive, framing the unit's second equity investment as proof sovereign capital can mobilise private-led syndicates. Kendall's RUSI address positioned the SAIU and ARIA as instruments of sovereign control, raising the political commitment attached to the June AI Hardware Plan.

Balderton Capital / Atomico / Index Ventures (UK growth-stage VCs)

At Series B and above, the UK ecosystem is in a strong position: $7.8bn in Q1 is 41% of European VC, seven unicorns were minted in three months, and London remains the deepest late-stage capital market outside the United States.