British Business Bank commits €25M to EQT Health Economics 3 Fund: What it means for UK medtech scale-ups

Fund focus: de-risked medtech and digital health

EQT Health Economics 3 (EQT HE3) launched in 2024 and has grown to a total fund size of approximately €216 million . Unlike typical early-stage venture funds, EQT HE3 focuses on commercial-stage, de-risked companies that have already:

• Secured established regulatory clearances (e.g., CE marking or FDA clearance)
• Demonstrated clinical evidence and product-market fit
• Passed clinical and regulatory risk, requiring capital to scale commercial operations rather than validate the technology

The fund targets companies developing medical devices, diagnostics, health technology, and digital health solutions across Europe, with a particular emphasis on UK scale-ups . Portfolio companies already include the UK's Cyted Health (gastrointestinal molecular diagnostics) and Phagenesis .

Organizational history: a new direct relationship

• EQT Life Sciences is one of Europe's longest-standing life sciences investors, with a 30-year track record in the sector, having raised over €3.7 billion across 13 private funds and backed more than 150 companies .
• The British Business Bank's Life Sciences Investment Programme (LSIP) was launched with a £250 million mandate to catalyse the UK life sciences ecosystem by investing in later-stage companies .
• While this €25m commitment to EQT HE3 is the first direct fund-level commitment between the two organizations, the Bank and EQT Life Sciences had previously co-invested in UK health technology companies including Phagenesis and Cyted Health before this fund commitment .

Why this investment? Executive rationale

Leandros Kalisperas, Chief Investment Officer, British Business Bank:

"Supporting UK scale-ups with the finance they need to grow is a vital part of the Bank's mission. The UK is home to a world-class life sciences ecosystem, but companies in this sector often face a funding gap when scaling up. This commitment supports the lifecycle of these companies, providing growth capital for businesses with the potential to transform healthcare delivery."

Christine Hockley, Partner, EQT Life Sciences (co-lead of EQT HE3):

"The UK is home to many of the world's most promising medtech and digital health companies, and we are delighted to have the British Business Bank's support. This commitment will help us back more of these companies as they scale, bringing innovative technologies to patients and healthcare systems."

Mark Andrews, Partner, EQT Life Sciences (co-lead of EQT HE3):

"EQT Life Sciences has a long track record of backing life sciences companies, and this commitment from the British Business Bank will allow us to continue to support the growth of the UK's medtech and digital health sector."

Stated reasons

Expected impact

The commitment is expected to:

• Provide growth capital to multiple UK medtech and digital health scale-ups through the fund
• Help bridge the "valley of death" between early-stage innovation and commercial adoption
• Strengthen the UK's position as a global hub for life sciences innovation
• Channel capital into companies developing products with the potential to transform patient care and deliver cost savings to healthcare systems

A signal to institutional capital

The commitment comes amid broader evidence of a persistent funding gap for later-stage UK life sciences companies, as documented in the Bank's own 2025 Life Sciences Investment Report . The Bank has been ramping up direct investing activity, surpassing £600 million in commitments, with Leandros Kalisperas describing the activity as "a clear signal to UK institutional capital that we want them to join us in backing UK scale-ups" .

By committing to a fund focused on de-risked, regulatory-cleared technologies, the British Business Bank is placing a measured bet on companies that have already passed the most critical technical and clinical hurdles — a strategy that could yield both commercial returns and systemic healthcare improvements.