The UK's biggest pension funds are in talks to launch a £1bn investment vehicle dedicated to backing British tech scaleups. A consortium including Railpen and Nest is working with the British Business Bank on the proposed UK Scale-Up Fund, aiming to create a first-of-its-kind vehicle to help homegrown startups commercialise, expand internationally and create jobs.

The announcement comes weeks after Sifted revealed France was seeking to block the UK's participation in the EU's €5bn Scaleup Europe Fund, casting doubt over British startups' access to one of the continent's biggest new sources of late-stage capital. Prime minister Andy Burnham described the proposal as "a vote of confidence in British business, British talent and British ambition."

Railpen CEO Andy Bord said the fund represents "a compelling investment opportunity where disciplined, patient capital can help growing companies scale." Nest chief Ian Cornelius added the pension provider saw "an important role for pension capital in helping successful UK businesses access the funding they need to grow." The proposal follows years of debate over the UK's shortage of domestic growth capital.