Key Takeaways
- • The Entrepreneurial Refugee Network (TERN) launched the Refugee Venture Fund, a £300,000 pilot venture capital fund dedicated to refugee-owned or refugee-led startups, described as the first of its kind in the UK.
- • The pilot plans to invest £50,000 to £100,000 each in three to five businesses, with the goal of building a track record to support a larger £10m vehicle.
- • The fund is structured as a special purpose vehicle with Class B investor shares carrying priority return rights up to initial investment, followed by an 80/20 split of profits between investors and reinvestment in the fund's mission.
- • Founding investors include This Day Foundation and businessman Sukhpal Ahluwalia, with Atomico providing an operational grant and Ada Ventures and Concept Ventures advising; fundraising continues until the end of January toward a £500,000 final close.
- • The pilot will run a 12-month performance review before TERN returns to market to seek follow-on capital for the larger fund.
Summary
The Entrepreneurial Refugee Network (TERN) on Wednesday launched the Refugee Venture Fund, a new £300,000 pilot venture capital fund dedicated to refugee entrepreneurs, according to The Social Enterprise Magazine and Pioneers Post. TERN, a social enterprise that supports refugees in becoming entrepreneurs through training, mentoring, expert advice and business opportunities, says the fund responds to limited access to investment for refugee founders, who are typically overlooked by UK investors due to a limited track record in the country, smaller networks and unfamiliarity with the UK funding environment. TERN also states that investors and financial institutions often hold negative misconceptions about refugee entrepreneurs' potential.
The pilot plans to invest between £50,000 and £100,000 in three to five refugee-owned or refugee-led businesses. The fund is not restricted to a specific sector but has a particular interest in software, AI and climate tech. It targets high-growth startups, with the stated aim of showing venture investors that refugee businesses can deliver "competitive financial returns" and "credible exit routes" within five to 10 years. To be eligible, businesses must be majority-owned or led by refugees, and founders must be UK-based and hold legal refugee status.
The fund is structured as a special purpose vehicle in which investors are shareholders. Investors hold Class B shares with priority rights to returns up to their initial investment; beyond that, 80% of profits go to investors and 20% are reinvested in the fund's mission. TERN holds Class A shares, which give it stronger governance rights to preserve the fund's purpose. The pilot will also assess its wider impact, including how many people from refugee and migrant backgrounds are hired by investees. Founding investors include This Day Foundation and Sukhpal Ahluwalia, who came to the UK as a refugee with his parents in the 1970s, alongside five smaller angel investors, trusts and foundations; individual commitment amounts were not disclosed. VC firm Atomico provides a grant to cover operational costs, and impact VC firms Ada Ventures and Concept Ventures act as advisors. Fundraising continues until the end of January, targeting a £500,000 final close.
TERN co-founder and strategy and partnerships director Charlie Fraser said the organisation has seen that the barrier for refugee founders is access to networks and capital rather than ability or ambition, adding that the fund "is about closing a market gap, not lowering the investment bar." Ahluwalia said refugees bring "a hunger, determination and drive to succeed." TERN has supported more than 1,800 refugee entrepreneurs across 21 UK cities since its founding in 2016, and its Skylight Ventures debt fund, launched in 2021, has invested in 150 businesses.
Fraser told Pioneers Post that the next step is deploying capital into three to five companies by the end of January, followed by a 12-month assessment of follow-on fundraising and traction. TERN then plans to return to market with that track record to seek a larger fund, with Atomico, Better Society Capital and the British Business Bank cited as potential interest, and Apex Partners, founded by Sir Ronald Cohen, mentioned as a possible follow-on investor. Fraser acknowledged that the small pilot size concentrates risk, noting that the fund must make "the right first five bets" while other VCs face less concentration pressure.
The pilot plans to invest between £50,000 and £100,000 in three to five refugee-owned or refugee-led businesses. The fund is not restricted to a specific sector but has a particular interest in software, AI and climate tech. It targets high-growth startups, with the stated aim of showing venture investors that refugee businesses can deliver "competitive financial returns" and "credible exit routes" within five to 10 years. To be eligible, businesses must be majority-owned or led by refugees, and founders must be UK-based and hold legal refugee status.
The fund is structured as a special purpose vehicle in which investors are shareholders. Investors hold Class B shares with priority rights to returns up to their initial investment; beyond that, 80% of profits go to investors and 20% are reinvested in the fund's mission. TERN holds Class A shares, which give it stronger governance rights to preserve the fund's purpose. The pilot will also assess its wider impact, including how many people from refugee and migrant backgrounds are hired by investees. Founding investors include This Day Foundation and Sukhpal Ahluwalia, who came to the UK as a refugee with his parents in the 1970s, alongside five smaller angel investors, trusts and foundations; individual commitment amounts were not disclosed. VC firm Atomico provides a grant to cover operational costs, and impact VC firms Ada Ventures and Concept Ventures act as advisors. Fundraising continues until the end of January, targeting a £500,000 final close.
TERN co-founder and strategy and partnerships director Charlie Fraser said the organisation has seen that the barrier for refugee founders is access to networks and capital rather than ability or ambition, adding that the fund "is about closing a market gap, not lowering the investment bar." Ahluwalia said refugees bring "a hunger, determination and drive to succeed." TERN has supported more than 1,800 refugee entrepreneurs across 21 UK cities since its founding in 2016, and its Skylight Ventures debt fund, launched in 2021, has invested in 150 businesses.
Fraser told Pioneers Post that the next step is deploying capital into three to five companies by the end of January, followed by a 12-month assessment of follow-on fundraising and traction. TERN then plans to return to market with that track record to seek a larger fund, with Atomico, Better Society Capital and the British Business Bank cited as potential interest, and Apex Partners, founded by Sir Ronald Cohen, mentioned as a possible follow-on investor. Fraser acknowledged that the small pilot size concentrates risk, noting that the fund must make "the right first five bets" while other VCs face less concentration pressure.
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