Future Fund Evaluation Report 2025 (Year 3) (British Business Bank)

Summary

• The Future Fund scheme delivered £1.14bn of funding to 1,190 companies between May 2020 and January 2021 through Convertible Loan Agreements (CLAs) ranging from £125k to £5m matched by private investors.p.5
• Around 70% (n = 75 out of 108) of survey respondent portfolio firms stated they would have closed within 12–36 months without Future Fund support.p.6
• Nearly 50% of recipient companies successfully raised follow-on private investment from sources such as venture capital, angel networks, and private equity without displacing private capital.p.7
• Supported portfolio firms posted median turnover growth of 22.5% in 2023 and 21.5% in 2024, outperforming counterfactual growth rates of 13.1% and -7.5%.p.7
• Portfolio businesses recorded employment declines of -16.7% in 2023 and -10% in 2024 as they prioritised R&D, scaling, and investment readiness over workforce expansion.p.7
• Over 700 recipient companies had successfully converted their convertible loans into equity stakes by Year 3 (2023).p.37

Key insights

1. The Future Fund deployed £1.14bn across 1,190 early-stage high-growth UK businesses using matched private investment to resolve severe pandemic equity financing constraints.p.5
2. Around 70% of surveyed recipient portfolio firms reported that they would have permanently closed within 12 to 36 months without the Fund's intervention.p.6
3. Median turnover growth for portfolio companies reached 22.5% in 2023 and 21.5% in 2024, significantly exceeding the 13.1% and -7.5% observed among counterfactual peers.p.7
4. A subset of top-performing outlier firms expanded approximately eight times faster than matched counterfactuals, heavily concentrated in IT and software sectors in London and the South East.p.7
5. Programme adaptations including extending loan repayment terms from three to five years provided vital breathing room for firms facing protracted post-pandemic recovery pressures.p.9
6. More than 700 portfolio companies successfully converted their convertible loans into equity by Year 3, validating the scheme's role in equity pipeline de-risking.p.37
7. A substantial 67% majority of surveyed lead investors rated their co-investment experience under the Future Fund as good or excellent.p.41
8. Geographic concentration remained aligned with wider venture trends, with 48% of portfolio firms and 42% of counterfactual firms headquartered in London.p.56
9. Between 2020 and 2024, portfolio firms registered a 14.2% compound annual growth rate in total fundraising compared to 6.3% for counterfactual businesses.p.78