Eka Ventures closes $107M Fund II to back UK health and sustainability startups
London-based impact VC Eka Ventures has closed its second fund at $107 million (£80 million), making it the UK's largest early-stage impact VC, the firm says.
The fund was anchored by a £40 million commitment from the British Business Bank, with other LPs including Better Society Capital, Guy's & St Thomas' Foundation, The Health Foundation, WRAP, Esmée Fairbairn Foundation, John Ellerman Foundation, and Vivensa Foundation.
Fund II will back up to 30 UK pre-seed and seed-stage companies across health, life essential products and services, and sustainable consumption, with average first cheques of around $2 million.
Fund I's performance makes a compelling case. Eka says the fund is in the top 5% of its 2021 vintage for both DPI — distributions to paid-in capital, a measure of cash already returned to investors — and TVPI, the total value of the portfolio including unrealised gains. Portfolio companies include Runna, the fitness platform that recently exited to Strava, household energy startup Axle, and insurance provider Urban Jungle, several of which went on to raise from Index Ventures, Accel, and Balderton.
That track record, combined with growing institutional appetite for impact-aligned returns, helped Eka close the fund at a meaningful step up from Fund I's £68 million close in 2021.
Impact investing at the pre-seed and seed stage carries the same execution risks as any early-stage strategy — high failure rates, long time horizons, and significant uncertainty in portfolio outcomes. The additional constraint of an impact mandate narrows the investable universe, which can create pressure when market conditions tighten and the best risk-adjusted opportunities sit outside the fund's thematic remit.
The British Business Bank's £40 million cornerstone also represents 50% of the fund — a concentration in a single LP that, while a vote of confidence, creates some dependency on public funding structures that could change with government priorities.
Eka's Fund II close is a data point in the gradual maturation of UK impact VC. The firm's LP base — dominated by philanthropic foundations and public institutions rather than commercial investors — reflects both the opportunity and the current limits of the market: genuine commercial returns from impact-aligned companies are still being demonstrated, not yet assumed.
The AI-powered deal sourcing platform that Eka credits with finding 47% of its Fund I investments is the firm's most distinctive operational differentiator, pointing to a thesis that the best impact founders are systematically overlooked by conventional VC sourcing. If that edge holds at Fund II scale, it could give Eka a durable advantage in a space where competition is growing.
Sources:
Eka Ventures
EU Startups
UKTN
Tech Funding News
The Next Web
Impact Loop
Camilla Dolan
Image credit:
Eka Ventures
J.V.
