Volution VC, a leading UK-based venture firm, has teamed up with Japan’s SBI Investment Co., Ltd. to launch a $100 million fund aimed at tackling one of the UK tech sector’s most persistent challenges: the critical shortfall of funding between Series A and Series B stages.
As UK startups face mounting difficulties securing follow-on capital—Series A funding fell by 44% in 2024 and Series A to B conversions have halved over the past five years—this new fund represents a vital bridge for businesses with established revenue streams poised for growth.
Strengthening UK-Japan Tech Ties
This partnership arrives as the UK deepens its strategic relationship with Japan, boosted by initiatives like the Hiroshima Accord to drive cross-border tech collaboration. The co-GP (general partner) structure allows both Volution and SBI to share investment oversight, mitigate risk, and leverage Japan’s vast $3.6 trillion pension fund market to support UK startups expanding internationally.
“The UK is a global leader in FinTech and AI, and we are excited to support its next generation of growth companies through this partnership,” said Tomoyuki Nii, Executive Officer at SBI Investment.
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Volution’s Mission: Unlock Growth Beyond Series A
Founded in 2021 by James Codling and Edward Peter Bardos, Volution VC was built to address the structural funding bottlenecks faced by scale-up tech companies. The firm targets businesses that have proven product-market fit, secured meaningful traction, and are generating at least £5 million ARR, yet still struggle to access critical scaling capital.
“The UK startup ecosystem has done well unlocking early-stage capital. But too many great companies get stuck—or fail—because of the lack of growth funding,” said James Codling, Managing Partner at Volution. “We aim to change that.”
The new fund focuses on sectors aligned with the UK’s Industrial Strategy, notably:
- FinTech
- AI and Machine Learning
- SaaS platforms
- Blockchain and ESG technologies
Initial investments include an AI-driven supply chain optimization platform and a blockchain-based ESG reporting tool, tapping into sectors forecasted to grow at 28% CAGR through 2030.
Proven Track Record — Strong Future Vision
Volution’s first fund backed 11 companies, achieving:
- 300% average revenue growth
- Three successful exits
- One unicorn — Zopa Bank, now preparing for its 2025 IPO
Portfolio companies like Cognism, Signal AI, Flagstone, and Wrisk underline Volution VC’s commitment to practical, scalable innovation.
Additionally, Volution integrates strong ESG principles into its investment model, including its “carbon carry” program, where a share of profits is reinvested into environmental initiatives — critical for AI-driven companies with high compute needs.
Opening Global Doors for UK Startups
For UK entrepreneurs, the partnership with SBI unlocks access to Japan’s $5 trillion economy and corporate networks, creating new pathways for international expansion, strategic partnerships, and M&A opportunities.
“By connecting scaling UK companies to Japanese capital and ecosystems, we’re creating a powerful new bridge for global growth,” Codling said.
Industry leaders welcomed the move:
- Janine Hirt, CEO of Innovate Finance, praised the fund’s role in “addressing a critical funding gap” and strengthening the UK’s leadership in FinTech and AI.
- Michael Moore, Chief Executive of BVCA, called it “a significant and timely partnership” aligned with the UK’s strategy for scaling tech.
With a $100M fund, strategic Japanese backing, and a laser focus on scaling Britain’s most promising tech companies, Volution VC is positioning itself as a key driver of the UK’s next phase of innovation and productivity growth.
