Liverpool SME investment specialist River Capital set up its fund:AI to support businesses utilising artificial intelligence in 2022 and is now welcoming the latest £2bn Government backing for the sector. Tony McDonough reports

 

Artificial intelligence has exploded into public consciousness in 2025, but it was Liverpool SME investment specialist River Capital which spotted the potential back in 2022.

It was then that it launched fund:AI, offering investments of between £500,000 and £2m to start-up and early-stage, high growth ventures working in AI, machine learning and data science.

Business and tech experts have been warning the UK is in danger of being left behind as the use of AI crowns exponentially across the globe. However, the Government at last now appears to be taking AI seriously.

In her Spending Review in early June, Chancellor Rachel Reeves allocated an extra £2bn to the Government’s AI Opportunities Action Plan. This will be allocated in a variety of ways.

There will be investment to beef up the UK’s supercomputing capacity, essential if we want businesses to have access to the best resources to realise their potential.

A £25m scheme is being launched to bring AI experts to the UK. Fellowship recipients will receive substantial packages to relocate to the UK and build a team of experts to conduct frontier AI research and contribute to the UK’s AI ecosystem.

And a new Sovereign AI Unit is to receive up to £500m. It will work together with the British Business Bank to create AI Growth Zones, which were a key recommendation of the AI action plan.

A new survey this week from banking giant Lloyds has found the majority of North West firms – 64% – believe AI adoption will be a key growth driver in their local economy.

Of the 62% of the region’s firms that are already using AI, 79% say it has increased their productivity, while 89% say it has increased their profitability – the highest proportion of any UK nation or region.

River Capital operates a number of investment funds and works closely with the British Business Bank to support SMEs in the Liverpool city region and across the north of England.

David Walters, investment director at River Capital, says it’s critical the Government starts taking the potential of AI seriously. Welcoming the £2bn cash injection, he hopes this is “just the beginning” and that the Government puts AI and digital tech at the heart of its industrial strategy.

“It wasn’t that long ago that we would talk about digital and non-digital businesses,” David explained. “That mindset is now out of date. There are hardly any businesses now, from sole traders to multinationals, who don’t use digital technology in one form or another.

“Back in 2022 we saw the discussion around AI going in the same direction. At the moment a lot of people are still unsure about what it is and what it could mean for their businesses and their daily lives.

“But expect that to change rapidly as AI and digital innovation starts to play a role in many aspects of our lives. Change is coming and it is coming quickly.”

 

 

River Capital’s fund:AI has already made a number of investments since its launch. They include contact centre technology company Mojo CX and VidiVet, a virtual veterinary service set up by Liverpool vet Ben Sweeney.

“At River Capital we are dealing with both sides – the investors and those entrepreneurs looking for both capital and expert support,” added Marc d’Abbadie, head of venture.

“For investors to invest they need to feel confident that success is possible.

“They don’t mind taking a risk on an innovative idea or concept but they want to know there is a wider business environment and ecosystem that will help these fledgling ventures take off.

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“Similarly, the entrepreneurs themselves need to feel confident enough to take that leap.  Our team has considerable sector experience in data rich businesses having invested, advised, and founded multiple AI companies in the region.

“We can support the launch and expansion of products, the creation and expansion of data science teams and the creation of IP/Product from untapped big data sets.

“AI isn’t the future, it is here right now. The potential for innovating in the AI space and becoming an investor in exciting new tech firms is huge and we encourage people to come and talk to us.”