British Business Bank backs EQT health sciences fund

The British Business Bank has committed €25 million to EQT Life Sciences' EQT Health Economics 3 Fund, adding to its support for life sciences funding in the UK.

The fund focuses on life sciences and medtech, targeting commercial-stage and de-risked medtech and digital health businesses. The commitment aligns with the bank's strategy of backing European-based funds that can invest in UK companies.

EQT Life Sciences has invested in the sector for 30 years. The firm has raised more than €3.7 billion across 13 private funds and backed more than 150 companies in therapeutics, medical devices, diagnostics and health technology.

For the British Business Bank, the commitment extends an existing relationship with EQT Life Sciences. The two have previously co-invested in UK health technology companies including Phagenesis and Cyted Health, in funding rounds worth USD $42 million and USD $44 million respectively.

According to information released alongside the deal, the bank is the largest investor in UK venture and venture growth capital funds. The latest move forms part of its broader effort to support high-potential life sciences businesses, a sector identified in the government's industrial strategy.

Sector focus

Life sciences companies often face long development cycles and high capital needs, particularly as they move from early research into later-stage development and commercial rollout. Investors with specialist expertise can play a central role in helping these businesses secure funding beyond the earliest stages.

The bank pointed to that funding gap in explaining the rationale for commitments to international specialist funds. By allocating capital to established managers based in Europe, it aims to increase the flow of investment and sector knowledge available to UK companies.

Christine Hockley outlined that position in comments on the transaction. "The UK is home to a world-class life sciences sector, but scaling companies in the sector requires specialist investors. By investing in high-quality international funds, we encourage greater investment to flow back into the UK and ensure UK companies benefit from the capital and expertise of leading investors," said Hockley, Managing Director and Head of Commercial Equity Funds, British Business Bank.

Mark Andrews linked the investment to the bank's broader portfolio strategy in the sector. "EQT Life Sciences is an established European specialist investor with a track record of backing companies from early development through to commercialisation. This commitment allows the Bank to access high-quality investments and supports UK companies developing new treatments and technologies," said Andrews, Senior Director, Life Sciences Funds, British Business Bank.

Existing ties

The commitment also reflects a relationship that has already produced direct investment activity in UK businesses. The co-investments in Phagenesis and Cyted Health gave the bank exposure to health technology companies developing products for clinical use and healthcare delivery.

EQT Life Sciences was formed after the integration of LSP into the EQT platform. Under the LSP name, the business built a long record in European life sciences and healthcare venture capital, supporting the growth of more than 150 companies over three decades.

The latest fund is aimed at businesses that have moved beyond the earliest and riskiest stages of development, suggesting a focus on companies with products or services closer to adoption by healthcare systems rather than purely experimental technologies.

Drew Burdon said the bank's participation would deepen that relationship. "Over recent years we have built an excellent relationship with the Bank through co-investments in leading UK health tech companies. The Bank's investment will further contribute to our commitment to tap into the attractive UK health tech ecosystem and grow strong companies together," said Burdon, Partner, EQT Life Sciences.

The British Business Bank said its core programmes support £23 billion of finance to almost 64,000 smaller businesses.