Venture capital firm Volution has launched a $100 million fund to back high growth FinTech, AI and SaaS businesses.
Volution has previously supported companies including Signal AI, Flagstone and FinTech unicorn Zopa Bank through an earlier fund which the company said has so far seen a 300 per cent average revenue growth and delivered three exits.
Its latest fund has been launched in partnership with Japanese venture capital investors, SBI Investment Co.
Volution said that the UK technology sector faces “significant” funding challenges beyond early-stage investment.
The company quoted data from Dealroom, which provides information about early stage companies, showing that funding at Series A stage dropped by 44 per cent in 2024 compared to the previous year. Series A to Series B conversion rates have also dropped by over 50 per cent in the last five years, according to the research.
Through the new fund, Volution said it aims to bridge this gap by backing businesses that have already established strong revenue streams but require additional capital to expand.
The new fund has already begun investment into one FinTech and one AI businesses which the company did not name.
James Codling, managing partner at Volution said that venture capital firms have “overfocused” on unlocking cash at the very early stage through various tax efficient investment schemes, adding that companies get sold, fold or “become walking zombies.”
“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,” he added. “They have figured out product-market fit, have a solid go-to-market strategy and are achieving significant revenue of at least £5 million.”
