Episode 1 raises new £60m fund from British Business Bank’s Enterprise Capital Funds programme to invest in UK seed companies with additional investment from ADV and Draper Esprit.
Episode 1, the backer of successful companies like Carwow, Triptease & AimBrain, today announces the closure of its second UK seed-to-Series A fund, raised to help passionate teams turn innovative insight into scalable operations. It leads rounds of £500k to £2m into teams with real insight into markets that are emerging or evolving.
The fund is a £60m Enterprise Capital Fund (ECF), raised with the support of the British Business Bank, the UK government’s economic development bank. As the largest UK-based investor in UK venture capital, the bank seeks to unlock the innovative potential of Britain’s small and medium sized enterprises.
The new fund is 60% bigger than the Episode 1’s first ECF, and oversubscribed, despite relatively tough economic times.
Paul McNabb, co-Managing Partner of Episode 1, believes this is testament to the value founders place in Episode 1’s ‘Company Builder’ methodology, and the quality of returns investors see this strategy producing, commenting: “There is no shortage of funds for the best entrepreneurs, but in our experience much of it is undifferentiated – there are few investors with the commitment to roll up their sleeves and get on with the heavy lifting that turns innovation into operations. We realise that for companies at this stage, the next handful of decisions they make are potentially transformational – and we plan to be there to help”.
Keith Teare, Executive Chairman of ADV added “By providing targeted support and smart capital at this pivotal stage of the lifecycle Episode 1 has built a strong reputation as a discerning investor and is rapidly becoming a top tier Seed to Series A VC. Fund 2 is a terrific next step and we’re really excited to be part of this journey”
Episode 1 Founding Partner Simon Murdoch added: “There is an enormous amount of experience at Episode 1. Whether that’s leadership positions at Amazon, Cisco or Elektra – or indeed starting and exiting their own companies – there are few funds at our stage that can offer this range and depth of experience. If I were to be a founder again, this experience is what I would be looking for.”
As an early stage fund, Episode 1 see thousands of business plans per year and invest where they see the best opportunities, but are particularly interested in how emerging ‘deep technologies’ such as AI are disrupting all industries and how technology is reinventing markets.
Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, commented: “We’re very happy to be investing once again in Episode 1, providing £36m of investment to their new fund. This is our 26th such commitment under our ECF programme, which now has a total investment capacity approaching £1.1bn.
“It is encouraging that the team was able to launch a significantly bigger fund with a bolder ambition, showing there is a quality of opportunity out there in the UK market for such investment”
In addition to the British Business Bank and a long list of private investors including many well-known entrepreneurs, several new institutions including Draper Esprit and ADV joined the ranks of the fund’s LPs.
Simon Cook of Draper Esprit observed that “Episode 1 are one of Europe’s leading seed funds, backing some of its biggest successes. As the number of new start-ups continues to increase, experienced operators like Episode 1 are needed to bridge the gap to the next round of institutional funding, and we are excited to partner with them on the next stage of their growth.”