Volution Partners with SBI Investment for $100M Tech Startup Fund

Volution, a prominent UK-based venture capital firm focused on growing tech startups has launched a new $100 million fund to address critical productivity challenges in capital markets and enterprises. This fund, Volution’s second dedicated vehicle, has been developed in collaboration with SBI Investment Co., Ltd., a leading Japanese venture capital firm, through a Co-GP partnership. The launch builds on the success of Volution’s first fund, with a number of its existing limited partners (LPs) committing to the new initiative.

The UK fintech sector continues to thrive, with notable successes like Allica Bank, which doubled its profits in 2024, and neobank Revolut, which reported a £1 billion profit in the same year. According to HSBC Innovation Banking, London, a global fintech hub, is home to over 185 fintech startups valued at over £1 billion.

However, in 2024, Series A funding dropped by 44%, and the conversion rates from Series A to Series B have halved over the past five years. Volution aims to address this issue by providing critical capital to businesses with solid revenue streams that need additional funds to scale further. The new $100 million fund aims to bridge the critical funding gap between the Series A and Series B stages, helping the region’s next wave of fintech innovation.

Volution’s new fund will primarily focus on sectors aligned with the UK’s Industrial Strategy, including fintech, AI, SaaS platforms, and blockchain technologies. The firm targets businesses with proven product-market fit and revenue of at least £5 million ARR, which are at the crucial inflection point for international expansion. Initial investments include an AI-driven supply chain optimization platform and a blockchain-based ESG reporting tool, both tapping into rapidly growing sectors. Volution aims to be the catalyst that helps these businesses achieve international growth and reach their next stage of success.

The firm’s first fund, which raised $30 million, achieved impressive results, including 300% average revenue growth and three successful exits. One of its portfolio companies, Zopa Bank, is preparing for its 2025 IPO. Volution has a strong track record of backing high-growth companies like Signal AI, Flagstone, and Cognism. 

James Codling, Managing Partner at Volution, highlighted the structural funding challenge in the UK market, particularly after Series A rounds. He emphasized the need for investment at the critical inflection point where companies are poised to scale internationally. 

“The UK startup ecosystem has unlocked early-stage capital, but too many promising businesses fail to progress due to a lack of growth funding,” Codling said. By focusing on companies that are already generating significant revenue, Volution’s fund aims to provide the necessary capital to help them scale globally.

The partnership with SBI Investment Co. also allows UK startups to access Japan’s $5 trillion economy and vast corporate networks. This global perspective is essential for companies seeking international expansion, strategic partnerships, and M&A opportunities. 

Tomoyuki Nii, Director at SBI Investment, emphasized that the UK’s leadership in fintech and AI, combined with Japan’s financial strength, makes this partnership a perfect fit. Volution’s focus on scaling businesses aligns with the growing demand for investment in fast-growing sectors such as fintech and AI, positioning the fund for success in a competitive global market.