“If you are a US company, you will go through the same number of funding rounds as a UK company, but you will raise X times as many,” said Catherine Louis La Torre, CEO of British Patient Capital. increase.
The large gap between funding and scale-up available to UK and US startups was just one of the problems. UK patient numbersl was established to address the 2018 launch. This week, the organization released an independent assessment of its progress to date. The figure suggests a positive strategy to provide public funds to tap into even more private sector cash. Implications for the UK innovation ecosystem. I spoke with Luis La Torre for more information.
British Patient Capital (a division of the British Business Bank) was launched after the government reviewed the funds available to support technology-driven companies. The Treasury said despite a thriving start-up community, there was a shortage of long-term, patient funding for companies that needed both capital and time to bring their offers to market. I discovered that there is
With £2.5 billion at its disposal, the BPC aimed to act as a catalyst. As Luis La Torre explains, the organization will work with his VC to provide growth capital in stages B, C and D. “They (VCs) can have trouble getting funding from institutions,” she says. “We join early by check and act as a cornerstone investor, so a VC can tell other investors that already she looks like £50m is booked. ”
BPC has already invested £1.3bn from the pot, bringing the total to £10.7bn including funding from other investors.
So what does this mean for scaling up? increased sales from £5 million.
Additionally, the pre-money valuations of companies in the portfolio are on average £60m higher than they would otherwise be.
The question, of course, is whether the companies in question would have created these jobs, increased their sales, and enjoyed their current valuations without BPC in the market. We can’t know for sure, but BPC senior manager Dan van der Schans said of the evaluation conducted by the research and analytics firm: SQW – A counterfactual group of similar ventures had to be set up to make comparisons. Additionally, in a poll of underlying portfolio companies, 25% said growth would not have been achieved without his BPC involvement, and 50% said it would have grown more slowly.
Scientific superpower agenda
I ask Luis La Torre how her organization fits in with the government’s more widely publicized ambition to transform Britain into a ‘scientific superpower’.
“People tend to use the phrase with a smile,” says Luis La Torre, admitting some skepticism. We want to make sure these companies get the funding they need.”
Currently, about one-tenth of the companies it backs are university spinouts, BPC says, well above the 2.0% average for all equity-backed companies. A quarter of them have successfully reached the “growth” stage identified by analysts. beauhurst.
But can UK companies compete with better-funded rivals? This goes back to the funding gap between UK and US startups and scale-ups. The ability for US-based companies to raise more capital will arguably make it easier to turn cutting-edge technologies into commercially viable products. Is there a way to fill that gap? Luis La Torre believes progress has been made and BPC is playing a role. She cites the fact that her £1.3bn investment in her organization to date has helped drive a total of £10.7bn in funding.
“It’s a good start, but it’s by no means the end of the job,” she says. And, as she admits, the UK isn’t the only country trying to enable tech champions to compete with their North American peers. “We are closing the gap, but so are other countries,” she says.
One thing that helps is more institutional cash (from pension funds, for example) flowing into VC funds. “It is important to increase institutional capital,” says Luis La Torre. “There are some, mostly from the US at the moment. But UK agencies are moving.
BPC will undergo two additional independent evaluations before the end of its 10-year lifespan. I would like to ask how the decision is made. “We want to make a commercial profit,” says Luis La Torre. This will show commercial investors that patient capital strategies can be profitable, she says.