The British Business Bank has committed £36m to Osney Capitals Fund 1 to support pre- and early-stage startups in the cyber sector.

The funding is through the Bank’s Enterprise Capital Funds programme, which is oversubscribed form its original target of £50m, is the first UK-focused cyber specialist seed fund to focus exclusively on early-stage UK cybersecurity.

Osney Capital, a Cheltenham-based sector specialist venture capital firm, is led by Adam Cragg, Josh Walter, and Paul Wilkes, who each bring decades of experience in technical, commercial, and regulatory environments in cyber and national security as well as early-stage investing.

The government-backed Bank’s Enterprise Capital Funds programme has helped develop and maintain effective venture capital provision in the UK, lowering the barriers to entry for emerging fund managers.

The programme has backed 50 funds, representing more than £2.5bn of finance and helps those fund managers specifically targeting early-stage businesses with long-term growth potential.

“We are pleased to make this commitment to Osney Capital’s Fund I, which aligns with our objective of supporting promising companies to access the long-term investment they need to fulfil their growth potential,” Christine Hockley, managing director and co-heads of funds, British Business Bank, said.

“Cyber resilience lies at the heart of the UK’s role as a responsible cyber power. Our commitment to Osney Capital will capitalise on the strong investment opportunity offered by growing UK companies within the sector while also building the UK’s national resilience.”

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Mark Sims, senior director, funds, British Business Bank, added: “The UK is a leader in cyber security innovation but is experiencing a shortage in funding for cyber security companies from specialist investors at the pre-seed and seed stage.

“By committing to Osney Capital’s Fund I we are working to fill this equity gap, whilst backing businesses developing technologies to protect themselves, their customers and their products.”

Paul Wilkes, partner at Osney Capital said: “The talent and technologies from the UK’s early-stage Cyber security ecosystem are world class and represent a fantastic opportunity for investors and the UK economy as a whole.

“We’re delighted to have the support of the British Business Bank as we launch this fund, and look forward to supporting the next generation cyber pioneers in the UK.”