The British Business Bank (BBB) hopes to take a stake in the EU’s €5bn Scaleup Fund and has held early discussions with government officials on the matter, Sifted understands.
The Scaleup Fund, which will be managed by Swedish investment firm EQT, was set up to address Europe’s longstanding lack of late-stage capital. It will invest in late-stage tech companies deemed strategically important to the bloc, such as AI, defence and semiconductors.
At present, the €5bn pot comes from EU member states. Companies in the UK — which exited the bloc following a referendum held in 2016 — are not eligible for investment.
The BBB’s participation would be contingent on approval from both Brussels and London.
The BBB’s chief investment officer, Leandros Kalisperas, told Sifted that the BBB would look to invest in the fund only if UK startups became eligible to receive investment from it. A person familiar with the situation told Sifted that the firm had met with government officials.
EQT previously told Sifted it would like to invest in UK companies, with the firm’s CEO describing the country as “the deepest pool of opportunities and pipeline.”
Prior to the resignation of UK prime minister Keir Starmer, the UK government had requested to start negotiations with the EU over its involvement.
There was a broad expectation the UK would request to join the fund, another person familiar with the discussions told Sifted. Finance minister Rachel Reeves has privately expressed her personal support for the proposal, Sifted understands.
But with a change in leadership underway, the UK's involvement is thought to rest on how its incoming prime minister — widely predicted to be Andy Burnham — envisages the country’s relationship with the EU.
Business relations between the bloc and Britain were set to be thrashed out at the EU-UK Summit next month, which has since been delayed due to Starmer’s resignation.
Whether the European Commission, and EU member states would approve the UK’s involvement remains uncertain. The BBB’s Kalisperas acknowledged that there were many interests to navigate, particularly when it comes to using the pot to fund UK companies.
“They have their other LPs too, and there are other countries to deal with,” he said, describing the situation as a “complicated picture”.
The European Commission declined to comment and the Treasury did not respond to requests to comment.
