Form Ventures Closes £30M Fund II for Regulated Startup Investment

Navigating the Complexities of Regulated Tech Markets

A significant proportion of U.K.-based technology companies valued at over $1 billion – often termed “unicorns” – operate within sectors heavily influenced by policy and regulatory frameworks.

These regulated industries, encompassing areas like fintech and health tech, or those with developing regulations such as cultivated meat, present substantial challenges for entrepreneurs.

The Launch of Form Ventures Fund II

Founders in these spaces must effectively engage with policy creators, regulatory bodies, and political figures.

Recognizing this need, Form Ventures has announced the final closing of its £30 million Fund II, designed to specifically support founders operating in regulated markets.

Fund Focus and Investment Strategy

Form Ventures will concentrate its investments on startups in the pre-seed and seed stages, focusing on sectors where policy and regulation play a defining role.

The British Business Bank serves as a key investor in Fund II, contributing through its Enterprise Capital Funds programme.

Expanding the Enterprise Capital Fund Portfolio

With the addition of Form Ventures Fund II, the Enterprise Capital Fund portfolio now comprises 36 funds, representing a total investment capacity of £1.66 billion.

Form’s Fund I previously invested in diverse areas including childcare, mental healthcare, carbon offsetting initiatives, and cellular agriculture.

The Importance of Policy Engagement

Patrick Newton, a partner at Form Ventures, emphasized the increasing impact of technology across various aspects of life, from mental wellbeing to childcare and environmental sustainability.

He stated that policymakers are now actively seeking to influence the pace and direction of technological disruption, moving away from the “move fast and break things” approach.

Smart founders who prioritize engagement with policymakers can accelerate their growth and establish a significant competitive advantage.

Addressing a Gap in Venture Capital Support

The question arises as to why dedicated support for founders in regulated markets hasn’t been more readily available until now.

Newton explained that many European venture capital firms adopt a generalist approach, lacking the specialized policy and regulatory expertise needed to effectively support these ventures.

He highlighted that this issue has already been addressed in the U.S., with firms like Tusk Ventures and Trust Ventures actively investing in companies such as Uber, Bird, Lemonade, and Ro.

Investment Details and Co-Investment Approach

Form Ventures will allocate between £200,000 and £1 million to pre-seed and seed-stage startups.

The firm typically operates as a co-investor, mirroring the strategy employed by Fund I, which previously participated in funding rounds alongside prominent investors like Index Ventures and Founders Fund, across nine startups.