NESTA has launched a new £50m fund to invest in innovative early-stage businesses over the next five years.

The Fund will look to invest up to £10m each year, offering individual start-ups seed money of up to £250,000 and investing £500,000 per company over the course of its development. In addition to financial input, companies will receive ongoing mentoring and business support from NESTA to maximise the potential of the business and attract further rounds of funding.

The Fund will focus on identifying, investing in and supporting particularly innovative early stage companies in the ICT, healthcare, technology and environmental technology sectors. A key aim of the Fund is to attract other investors to work in partnership with NESTA in funding selected start-ups.

NESTA will also use the Fund to invest in seed or early-stage funds, either as a limited partner or co-investor and will make two or three investments per year from £1m to £3m.

Commenting on the new Fund, NESTA Chief Executive, Jonathan Kestenbaum said: ‘With the private sector vacating early-stage funding after the era and the government now shifting its focus to more developed businesses, the UK is facing a potential dearth of investment in this area. Our fund is designed to plug this gap both directly and by demonstrating the viability of early-stage investment to third parties.’