Northern venture capital firm Northern Gritstone has secured £20m in fresh funding as part of a new rolling close, with British Business Bank committing £10m as a cornerstone investor.
The latest investment builds on Northern Gritstone’s existing £362m permanent capital base, taking its total to £382m, as the firm looks to accelerate its ambition to create global life sciences and deeptech businesses rooted in the North of England.
The £20m close includes backing from existing shareholders, with the British Business Bank increasing its total commitment to £40m. Additional investment comes from Andrew Law, CEO of hedge fund Caxton Associates.
Northern Gritstone said the funding marks the start of a wider capital raise planned across 2026, as it continues to scale its investment activity across sectors including semiconductor design, AI, healthtech and gene therapies.
Since launching in May 2022, the firm has made 51 investments, many of them spinouts from the so-called Northern Arc universities of Leeds, Liverpool, Manchester and Sheffield. Collectively, those institutions generate close to £800m in research funding annually.
The British Business Bank said its continued support reflects its focus on strengthening the UK’s spinout ecosystem, with almost a quarter (24%) of university spinout deals between 2022 and 2024 supported by the organisation.
Northern Gritstone Chair, Lord Jim O’Neill, said: “We are very grateful for this further support from the British Business Bank and Andrew Law to continue developing global businesses in the North of England originating from our ‘Northern Arc’ university ecosystem. In this way, investors are contributing to future higher value-added activity and the North’s productivity”
Chief executive Duncan Johnson added: “This strong start to Northern Gritstone’s rolling close in today’s challenging fundraising environment shows the belief in innovation coming from the North of England. The region is now an integral part of the UK’s Technology Diamond, and we are proud to support the incredible talent of the North, helping to commercialise groundbreaking research into internationally commercial businesses.”
Christine Hockley, Managing Director and Head of Commercial Equity Funds at the British Business Bank, said: “The UK’s universities are a powerhouse of breakthrough research, and Northern Gritstone plays a vital role in transforming world-class research from the North of England into high-potential, IP-rich businesses. Our increased commitment reflects the Bank’s ambition to scale life sciences and deeptech businesses, which are critical to the UK’s future growth.”
