Molten's £175m growth fund tests whether a listed VC can live on other people's money
The London-listed investor has a £75m cornerstone from the British Business Bank for a Series B+ vehicle. The harder question is whether private LPs will follow its own £100m.
Molten Ventures, the London-listed venture investor best known as a backer of Revolut and the Finnish satellite company ICEYE, announced on Monday the first close of a new private vehicle, the Molten Ventures Growth Fund, at £175m. The British Business Bank, the state-owned development bank, is the cornerstone with a £75m commitment. Molten has put up the remaining £100m from its own balance sheet and is seeking further investors towards a target of £350m.
The sums are modest by the standards of American growth funds. The structure is not. For most of its life Molten has invested its shareholders' capital directly, which has tied the size of its cheques to the mood of the stock market. A fund that lets private institutions invest alongside the listed company at Series B and later is an attempt to break that link, and it lands at a moment when British policymakers are openly worried that the country's best young technology companies leave for American money once they need to scale.
What has been raised, and what has not
The headline figure deserves a careful reading. Of the £175m, only the £75m from the British Business Bank is outside capital. The rest is Molten investing in its own fund. That is not unusual for a first close, and a sponsor commitment of that size aligns the manager with its limited partners. But it means the vehicle has so far attracted exactly 1 external investor, and that investor is an arm of the state whose mandate is to support British venture capital.
Molten has said it will keep marketing the fund until it reaches £350m. In practice, the second half of the target will have to come from pension schemes, insurers, endowments or family offices that are not under any policy obligation to back domestic growth equity. Their response will be the real verdict on the strategy.
Ben Wilkinson, the chief executive, described the cornerstone as a strong endorsement of the firm's approach, and senior partner Franco Danesi said it gave the team momentum towards the target. Robert Greenwood, senior director for funds at the British Business Bank, framed the commitment as a way to help British entrepreneurs scale faster. The bank has been an investor in Molten's listed platform since 2018 and has co-invested with it in SatVu, IMU Biosciences, Thought Machine and Paragraf, so the relationship is long and the diligence presumably thorough.
The strategy the fund is buying
The Growth Fund continues what Molten calls its Series B+ strategy: backing companies as they move from early growth into larger rounds. According to the firm, it has completed more than 40 deals at that stage over the past 10 years, invested more than £700m and produced returns it describes as top quartile. Those return figures are the manager's own and have not been independently published. The target sectors are space, artificial intelligence, fintech, quantum computing, deeptech and hardware, across Britain and continental Europe.
The legal adviser on the launch, Simmons & Simmons, described the vehicle as a private fund that gives institutional investors access at scale while drawing on the platform and governance of the listed company. That is the pitch in one sentence. An institution that would not buy shares in a listed venture firm, with the volatility and the discount to asset value that come with it, can instead take a direct interest in a portfolio of late-stage stakes selected by the same team.
Why a listed investor wants a private fund
Molten's own numbers explain the motive. In its results for the year to 31 March 2026, published in June, the firm reported net asset value of 760p per share and net assets of £1,324m. It also reported £120m of cash from realisations and £38m spent on share buybacks during the year, while group cash fell to £52m from £89m. When the shares trade below asset value, every pound used to buy them back is a pound not invested in new companies, and every pound invested in new companies is one not used to close the discount. Third-party money relieves that tension.
On Monday morning the shares rose 2.6% to 700.5p, according to AJ Bell, which still left them below the March asset value. Wilkinson said in June that the firm was making progress in scaling third-party capital alongside its balance sheet, and the Growth Fund is the most concrete step so far. It follows the recent creation of a dedicated secondaries team, Molten Secondaries. A management fee stream from outside investors would also make the listed company's earnings less dependent on mark-ups in a handful of large holdings; Molten valued its ICEYE holding alone at £317m after that company's Series F round in June.
The policy backdrop
The launch also fits a wider political effort. Tech.eu noted that Molten has been reported by Sky News to be in contention to manage a separate £1bn government-backed fund for British scale-ups, financed by a group of pension schemes, alongside M&G Investments and Schroders. Nothing has been decided, and the two vehicles are distinct. But the direction of travel is clear: the government wants domestic institutions to fund the rounds that British companies too often raise in California, and it is using the British Business Bank to lead.
That creates an opportunity for managers with a credible growth record, and a risk. Capital that arrives because of policy can retreat when policy changes, and fund managers that size themselves around a public cornerstone may struggle if private institutions remain wary of a market where exits have been scarce.
Our view
Molten's first close is a sensible step for a listed venture firm whose shares have long traded below the value of what it owns. Raising private capital to sit alongside the balance sheet should allow it to keep writing Series B cheques without selling shares cheaply or starving its buyback programme. The British Business Bank cornerstone gives the fund credibility, and the £100m sponsor commitment shows real alignment.
But investors should not mistake a first close for market validation. So far the only outside money is public money. The test is whether pension funds and insurers, the investors British policy most wants to draw into growth equity, commit the remaining £175m on commercial terms. Founders of British Series B companies should welcome another domestic lead investor, while noting that the fund's capacity depends on that second raise. For Molten's shareholders, the signal to watch is whether fee income from outside capital begins to narrow the gap between the share price and net asset value over the next year.
Sources
- Molten Ventures: £175m first close of Molten Growth Fund with cornerstone commitment from British Business Bank
- Tech.eu: Revolut backer Molten Ventures hits £175M first close of growth fund
- AJ Bell: Molten Ventures secures GBP175 million first close for growth fund
- BusinessCloud: British Business Bank backs Molten Ventures £175m growth fund
- Simmons & Simmons: Simmons & Simmons advises on launch of Molten Ventures Growth Fund I
- Dealroom News: Molten Ventures hits £175m first close on growth fund, targets £350m
- Molten Ventures: Molten Ventures Annual Results FY26
Filed under Venture Capital. Written by Invest Times Editorial under our editorial standards. Commentary and analysis for information only, not investment advice.
