The fund has been launched in partnership with Japanese venture capital investors, SBI Investment Co., Ltd. through a Co-GP arrangement that leverages the strengths of both managers. This is Volution’s second dedicated fund and following the success of the first, a significant number of Volution’s existing LPs have recommitted to the new fund.

The UK technology sector faces significant funding challenges beyond early-stage investment. In 2024, funding at Series A dropped by 44% compared to the prior year. More worryingly, Series A – Series B conversion rates have dropped by over 50% in the last five years.

Through its new fund, Volution aims to bridge this gap by backing businesses that have already established strong revenue streams but require additional capital to expand. The UK has been actively seeking collaborative engagement with Japanese investors at many levels, and this fund creates an opportunity to lead the way.

Volution has a strong track record of supporting high-growth companies such as Signal AI, Flagstone, and Cognism. Its first fund has so far achieved 300% average revenue growth, delivering three exits, and Volution’s portfolio includes one unicorn, Zopa Bank. The new fund has already begun deployment, with initial investments in one fintech and one AI business.

James Codling, Managing Partner at Volution said: “The UK has a huge challenge at the moment. The Government is laser focused on productivity and growth but there is a fundamental structural funding challenge. We have overfocused on unlocking cash at the very early stage through various tax efficient investment schemes but the money tends to evaporate post Series A. Companies get sold, fold or become walking zombies. Investment at the inflection point of international growth is critical for the tech company and offers the most significant returns for LPs.

“The businesses we back aren't just an idea and a couple of letters of intent. These are successful businesses aligned with the Government's Industrial Strategy. They have figured out product-market fit, have a solid go-to-market strategy and are achieving significant revenue of at least £5 million ARR. Volution is the catalyst to propel them to the next stage, both financially and by leveraging the team's extensive experience in scaling tech businesses.”

Tomoyuki Nii, Director, Executive Officer (Overseas Investment) SBI Investment Co., Ltd said: “The UK is a global leader in fintech and AI, with world-class universities, a strong regulatory environment and a thriving entrepreneurial ecosystem. These strengths make it an attractive destination for investment. Our cornerstone commitment to Volution comes at a time when Japan and the UK government are strengthening economic ties to drive growth across both markets. Building on the success of Volution’s first fund, it will provide a new funding option for fast-growing UK businesses looking to scale.”

Janine Hirt, CEO at Innovate Finance said, “We are delighted to see the launch of the Volution SBI Co-GP vehicle, a testament to the strength and global appeal of the UK FinTech sector. By focusing on innovative companies leveraging AI, machine learning, and blockchain to drive productivity, the fund addresses a critical funding gap and supports the growth of UK businesses wanting to reach global markets. This partnership both aligns with the UK’s strategic priorities on FinTech, AI, and innovation, and it reinforces the collaborative synergies between the UK and Japan.”

Michael Moore, Chief Executive, BVCA said: “The SBI Volution Venture fund is both a significant and timely partnership. With the rapid evolution of technology globally, both UK and Japanese investors recognise the unique strengths of Britain's leadership in FinTech and AI as well as its robust investment ecosystem. The fund's focus on scaling businesses is vital, tapping into a swiftly developing market segment with a promising opportunity pipeline”

Beyond financial returns, Volution is pioneering an ESG-focused initiative designed to encourage responsible and sustainable growth across its portfolio. Its Carbon Carry initiative incentivises founders to adopt best practices across ESG. Recognising the high computing resource demands of AI-driven companies, Volution reinvests a portion of its profits into carbon offset initiatives to mitigate the environmental impact of its portfolio companies.

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