British Business Bank Invests €46 Million in FPE Capital’s Fund IV First Round

The British Business Bank (BBB) has recently announced a significant investment of €46 million (£40 million) in FPE Capital’s Fund IV. This investment is aimed at supporting the growth of small businesses in the UK and Ireland.

This commitment follows a previous investment of €23 million (£20 million) in FPE’s Fund II back in 2017. The current commitment to Fund IV is part of a first close that exceeds the size of the previous fund.

Adam Kelly, Managing Director and Co-Head of Funds at the British Business Bank, stated, “There is a noticeable lack of funding in the lower-mid-market, especially for small businesses that have progressed beyond early-stage funding. FPE is addressing this gap by offering a flexible solution to businesses at a crucial stage of their growth journey. By supporting firms like FPE through our extended mandate, the Bank is increasing the availability of capital for UK businesses looking to advance to the next phase of growth.”

Blair McDougall, Minister for Small Business and Economic Transformation, added, “Through our Modern Industrial Strategy, we are facilitating investments that high-growth firms require to succeed and compete from the UK.

“This assistance is targeted towards the most ambitious SMEs in key sectors, enabling them to expand, generate high-quality jobs, boost growth, and enhance living standards across the UK.”

Established in 2016, FPE is a specialized private equity investor focusing on scaling B2B software, data, and software services businesses.

The fund typically invests in companies in the UK and Ireland with enterprise values ranging from €11 million to €86 million (£10 million to £75 million). It primarily targets founder-led businesses, often as their first institutional investor.

The current commitment falls under the BBB’s growth equity strategy, enabling investments in lower-mid-market private equity funds that support smaller businesses aligned with the Government’s eight growth-driving Industrial Strategy sectors.

According to the BBB, their core programs have facilitated €26 billion (£23 billion) of financing for nearly 64,000 small businesses.

Operating on a fully commercial basis, the growth equity strategy aims to attract additional private capital to provide scale-up finance for UK companies and bolster regional growth in key sectors of the economy.

Richard Coldwell, Investment Director, Funds at the British Business Bank, mentioned, “FPE is a specialist growth investor with a proven track record in scaling UK software, data, and software services businesses. The Bank’s commitment will ensure that growth capital reaches high-potential companies entering the next phase of their growth journey. By focusing on the Digital and Technology, and Professional and Business Services sectors of the Industrial Strategy, FPE will contribute to creating high-value jobs and driving economic growth across the UK.”