Episode 1 raises new $81 million fund to invest in UK-based startups

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Episode 1, the backer of successful companies like Carwow, Triptease & AimBrain, just announced the closure of its 2nd UK seed-to-Series A fund, raised to help passionate teams turn innovative insight into scalable operations. It leads rounds of £500k to £2m into teams with real insight into markets that are emerging or evolving.

The fund is a $81 million Enterprise Capital Fund (ECF), raised with the support of the British Business Bank, the UK government’s economic development bank. As the largest UK-based investor in UK venture capital, the bank seeks to unlock the innovative potential of Britain’s small and medium sized enterprises.

The new fund is 60% bigger than the Episode 1’s first ECF, and oversubscribed, despite relatively tough economic times.

Paul McNabb, co-Managing Partner of Episode 1, stated: “There is no shortage of funds for the best entrepreneurs, but in our experience much of it is undifferentiated – there are few investors with the commitment to roll up their sleeves and get on with the heavy lifting that turns innovation into operations. We realise that for companies at this stage, the next handful of decisions they make are potentially transformational – and we plan to be there to help.”

Episode 1 Founding Partner Simon Murdoch added: “There is an enormous amount of experience at Episode 1. Whether that’s leadership positions at Amazon, Cisco or Elektra – or indeed starting and exiting their own companies – there are few funds at our stage that can offer this range and depth of experience. If I were to be a founder again, this experience is what I would be looking for.

As an early stage fund, Episode 1 see thousands of business plans per year and invest where they see the best opportunities, but are particularly interested in how emerging ‘deep technologies’ such as AI are disrupting all industries and how technology is reinventing markets.

Ken Cooper, Managing Director, Venture Solutions at the British Business Bank, commented: “We’re very happy to be investing once again in Episode 1, providing £36m of investment to their new fund. This is our 26th such commitment under our ECF programme, which now has a total investment capacity approaching £1.1bn.

In addition to the British Business Bank and a long list of private investors including many well-known entrepreneurs, several new institutions including Draper Esprit and ADV joined the ranks of the fund’s LPs.

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