Backing early-stage companies from entry through to exit, Accelerated Digital Ventures (ADV) will be supported by Woodford IM, Legal & General Capital (LGC) and British Business Bank.
ADV will invest an initial £150m in digital start-ups through its platform, offering access to capital, coaching, customers and corporates.
Neil Woodford, head of investment at Woodford IM has recognised a “capital funding gap” between seed and scale-up investment stages for UK companies in their infancy.
His group has committed to a £50m investment.
Woodford said: “Early-stage businesses in the UK are frequently constrained by two weaknesses: the poor availability of capital and the short period over which it is provided.
“This twin problem often leads to a capital funding gap between the seed and scale-up investment stages, which can then lead to promising UK-based companies either failing to fulfil their potential, or having to sell out to larger, often foreign, businesses.
“We believe that the ADV platform, with its investment partners, is now equipped to overcome these issues and that, over time, it will generate both significant success for UK plc and attractive long-term returns for shareholders.”
The platform will target existing technology hubs across Belfast, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, London, Manchester, Newcastle, Oxford and Sheffield, aiming to provide equity capital to help thousands of business start-ups to become globally successful UK scale-ups.
ADV will inject patient capital at the very early stage of a business’s life, through accelerator hubs and incubators around the UK and through microfunds.
It will also support growth and later-stage businesses as they mature, offering funding and expertise from industry experts and proven entrepreneurs.
ADV’s long-term aim is to invest upwards of £200m every year into UK-based start-ups and scale-ups.
Paul Stanworth, managing director of Legal & General Capital, said: “The UK has faced chronic underinvestment in physical and digital infrastructure for far too long.
“If we are to capture and catapult the best of British enterprise more akin to Silicon Valley, we need early-stage capital support.
“With ADV we are pooling together patient capital from three like-minded long-term investors as we back disruptive businesses and fuel innovation across all of the UK’s regions, not just in London.”