The Refugee Venture Fund, a new £300,000 pilot from The Entrepreneurial Refugee Network (TERN), aims to give refugee-founded UK startups access to venture capital. Launched Wednesday, it plans to invest £50,000 to £100,000 in three to five businesses.
TERN says the fund is designed to address a gap for ambitious founders who have often been overlooked by UK investors. The pilot is intended to build a track record for refugee-first investment and could become a first step toward a larger £10m vehicle.
How the Refugee Venture Fund Will Invest
The Refugee Venture Fund will consider startups with high-growth potential across sectors. TERN said it will have particular interest in software, AI and climate tech, while avoiding a focus on any single industry.
Eligible businesses must be majority-owned or led by refugees. Their founders must be based in the UK and have legal refugee status. TERN aims to show investors that refugee-led companies can offer “competitive financial returns” and credible exit routes after five to 10 years.
The structure also sets out how returns and governance will work. Investors hold Class B shares, with priority rights to returns up to the amount of their initial investment. Beyond that, 80% of profits go to investors and 20% return to the fund’s mission. TERN holds Class A shares, which give it stronger governance rights intended to preserve the fund’s purpose.
Building a Track Record for Refugee Founders
TERN co-founder and strategy and partnerships director Charlie Fraser said the organization had spent over a decade working with refugee entrepreneurs. He said founders’ challenge was often access to networks and capital that other entrepreneurs could take for granted.
Fraser said TERN first considered a £10m venture fund, but concluded that raising that amount without a track record would be difficult. The organization then shifted to a smaller proof-of-concept vehicle. According to Fraser, that change made it easier for investors to commit.
Founding investors include This Day Foundation, businessman Sukhpal Ahluwalia and five smaller investors, including individual angel investors, trusts and foundations. The amounts committed by each investor were not disclosed. Venture firm Atomico provided a grant for operating costs, while Ada Ventures and Concept Ventures are advising the fund.
Ahluwalia, who came to the UK as a refugee with his parents in the 1970s, said the fund could help refugee entrepreneurs build ambitious businesses. He linked that goal to creating jobs and supporting British companies that sell internationally; those are his expectations, not guaranteed outcomes.
Fundraising and the Next Step
The Refugee Venture Fund will continue fundraising until the end of January, with a target final close of £500,000. Fraser said TERN expects to deploy as much as it raises by then across three to five companies.
The pilot will then give TERN 12 months to assess how those businesses perform, including whether they raise follow-on rounds. Fraser said TERN would use that performance record to return to the market and explore raising follow-on capital for a larger fund. He also described a constraint: a small pool of investments leaves pressure on the pilot’s first five bets, while a limited track record makes it harder to attract larger amounts.
TERN has supported more than 1,800 refugee entrepreneurs across 21 UK cities since its founding in 2016. It launched Skylight Ventures, a debt fund for micro-loans, in 2021; that fund has invested in 150 businesses. The pilot’s next test is whether its first investments can build evidence for further funding. The approach also connects with other efforts to address access to basic services, including community pharmacies in Cuba, and with founders whose growth has depended on access to capital, as in this entrepreneurial startup story.
Read the original report for further details on TERN’s fund and the planned pilot.