TERN Bets a £300,000 Pilot Can Unlock Refugee VC

The Entrepreneurial Refugee Network opened the Refugee Venture Fund on 14 October 2026 with £300,000, enough for three to five cheques of £50,000 to £100,000. TERN, a UK nonprofit that has spent a decade with refugee founders, built the vehicle with Atomico and a small group of cornerstone investors.

Those first investments are designed to create a track record TERN can take to a planned £10 million fund. The bar for a cheque is the same one other seed funds use: a product, a pilot, or real sales, not an idea on a slide.

A £300,000 Pilot Has to Prove a £10 Million Thesis

The opening pot may rise to £500,000. Even then it is a test book, not a market-wide finance shop. TERN will put the capital into a special purpose vehicle with two share classes, so the nonprofit keeps extra voting rights and can hold the mandate to back refugee-founded firms only.

Charlie Fraser, TERN co-founder and strategy and partnerships director, has been making that point for years. Ability is not the missing piece, he says. Networks and capital are.

We’ve spent over a decade working with refugee entrepreneurs and have repeatedly seen that the problem isn’t a shortage of entrepreneurial ability or ambition. It’s access to the networks and capital that other founders can take for granted. The RVF will back the UK’s most ambitious refugee founders, which traditional venture funds overlook. This is about closing a market gap, not lowering the investment bar.

Charlie Fraser, Co-Founder and Strategy and Partnerships Director, TERN

The fund is open on sector, with a stated lean toward software, AI, and climate technology. It wants majority-refugee ownership or leadership, UK-based founders with legal refugee status, and a credible sale or exit in five to ten years. Portfolio firms get 12 months of coaching, including pitch work, plus TERN’s current network of more than 700 refugee founders.

THE THREE VEHICLES ON TERN’S LADDER

A £300,000 book cannot fill a national finance gap. It can produce a handful of priced rounds, board seats, and follow-on conversations that TERN did not have when it first tried to raise the large fund.

TERN Spent Three Years Trying to Raise the Big Fund First

The £10 million target is not a new slide. In early 2023 TERN took a grant from the Atomico Foundation to test a fund idea. Village Capital joined as an implementation partner in July 2023. By May 2024 the two groups were hiring a fund manager to finish a raise for a £10 million pre-seed venture fund and to build a book of 27 scaling companies over three years. The pack was blunt: there was no guarantee the fund would exist.

The Atomico Foundation has backed TERN since 2020, first through the TakeOff programme, then through staff time on angel finance, branding, and mock pitches. Fraser told the foundation that the partnership helped legitimise the community and the mission. Atomico’s name is now on the 2026 launch as a partner, which is a different claim from writing the cheques itself.

Lilijan Sulejmanovic was introduced in 2024 as fund manager. She is British-Bosnian, came to the UK from Sarajevo in the early 1990s, holds a Harvard MBA, and founded the snack brand Bardo after years in consulting and private equity. The 2026 briefing lists her for operational support. The large raise did not close. The SPV did.

THE ROAD TO THIS PILOT

1. 2016: TERN starts as a community interest company helping refugees build businesses in the UK.
2. 2020: Skylight Ventures begins making small interest-free loans, and the Atomico Foundation starts backing TERN programmes.
3. Early 2023: The Atomico Foundation grants TERN money to explore a venture fund.
4. July 2023: Village Capital joins as implementation partner on a £10 million pre-seed plan.
5. June 2024: TERN advertises a fund-manager post to complete that raise and deploy into 27 companies.
6. 27 January 2026: TERN and Square publish estimates of current and possible economic output from refugee-run firms.
7. 15 September 2026: The Cedar Review, led by Small Business Britain, puts a separate £2 billion tag on the same problem and sends eight asks to government.
8. 14 October 2026: Applications open for the £300,000 Refugee Venture Fund.

That sequence is the bet in plain view. TERN could already coach founders. It could already lend four figures. It could not show UK venture partners a book of priced equity rounds in this community, so it is writing the first ones itself.

Interest-Free Loans Stop at £2,500

Skylight sits under the new fund and explains why a venture product appeared at all. TERN spun it out after founders in coaching kept hitting the same wall: banks wanted a UK track record, and grants stopped at setup. The loan book offers interest-free loans of up to £2,500, repaid over as long as 24 months, with a decision in about three weeks and a community vote on applications. The stated goal was £600,000 of loans to 800 refugee entrepreneurs by 2026.

That product can buy a coffee machine or a first event. It cannot hire a senior engineer or fund a 12-month software runway. Jasmine Abakarova, founder of the bomboloni business Boemo and a TERN-supported founder, described the gap from the trading floor rather than from a term sheet.

“Without a network or guidance, every decision you make as a refugee business owner can feel heavier,” Abakarova said. “Every email and customer opinion hits you, and this can be especially tough with no financial cushion or family support, and no margin for error.”

The Cedar Review, based on a survey of 81 refugee entrepreneurs, found that 40 per cent named access to startup finance as a major challenge. It also found that 71 per cent needed support they could not get. The review’s own fix was a funding ladder from micro-grants to growth capital. Skylight is the bottom rung. The new SPV is the first attempt at a rung that looks like venture.

Two Studies Put Very Different Price Tags on the Gap

TERN’s case for a market, rather than a charity product, rests on work published with Square on 27 January 2026. TERN estimates there are 26,500 refugee entrepreneurs in the UK, already putting £520 million into the economy. With coaching and finance, that figure could reach £5.1 billion, a path that assumes about 7,000 extra founders and a doubling of turnover among those already trading. The pound figures were produced by Business Fights Poverty. The same pack says those 26,500 people are about 8 per cent of working-age refugees.

THE TERN AND CEDAR READINGS

• Current output: TERN puts today’s contribution at £520 million from 26,500 self-employed refugees.
• TERN upside: The Square report’s high case is £5.1 billion if finance and coaching arrive.
• Cedar upside: Small Business Britain’s September review uses a separate method and lands at £2 billion if barriers fall.
• Founder history: In Cedar’s survey of 81 people, 56 per cent had run a business before arriving, and 79 per cent already employ staff or plan to.

The two big numbers are not a disagreement about a single sum. They are two models of the same unused capacity. Public opinion still sits a long way behind both. Square’s Censuswide poll of 2,000 UK adults, taken from 12 to 18 December 2025, found that only 7 per cent see refugees as entrepreneurs and only 10 per cent see them as economic contributors.

Cedar also asked government to do things no SPV can do. It wants permission to work to include self-employment, and it wants the wait before that permission cut from 12 months to six, in line with the EU recast Reception Conditions Directive. It wants verified business activity to count toward settlement. Five well-chosen cheques will not move those rules. They may, if the companies survive, make the next conversation with a mainstream fund less abstract.

Founding Cheques Arrive From Dominus and Two Foundations

The fund briefing names Dominus, This Day Foundation, and Future Leaders as founding investors. Sukhpal Ahluwalia, non-executive chairman of Dominus and founder of Euro Car Parts, is a founding shareholder. He is putting family-office capital into a book that looks, on paper, nothing like student housing or car parts. His reason is personal, and he said so.

Refugees bring a hunger, determination and drive to succeed, and this fund will help them build ambitious businesses even faster. That means new jobs, more British companies selling to the world, and a stronger UK tech sector. My family sought refuge here after escaping Idi Amin’s rule, so this one is personal for me. As I look towards my retirement to India, I want to help the next generation of founders keep the UK competitive for decades ahead.

Sukhpal Ahluwalia, Investor and Founding Shareholder, Refugee Venture Fund

The advisory bench is there to make the book readable to other funds. Reece Chowdhry of Concept Ventures, Matt Penneycard of Ada Ventures, and Amir Rizwan of London Social Ventures sit on it. Chowdhry’s firm is a specialist pre-seed house; Ada is known for writing early cheques to founders other funds skip. Their names do not replace a track record. They are how TERN wants the first three to five deals to be judged on the same terms as any other seed round.

TERN says it has worked with nearly 2,000 refugee founders over ten years, a lifetime count that is larger than the current peer network of more than 700. Deal flow is supposed to come from that community first, then from university incubators, refugee scholarship networks, enterprise programmes, and diaspora groups that ordinary venture partners rarely visit. The sourcing plan is an admission: the companies TERN wants do not live on the usual intro lists.

Who Can Apply and What the Cheques Look Like

Founders based in the UK with legal refugee status, and companies with majority-refugee ownership or leadership, can apply from 14 October 2026. Cheques are set at £50,000 to £100,000, aimed at firms that already have a minimum viable product, a pilot, or commercial traction, with a first round expected to close in December and all opening capital scheduled for allocation by March 2027.

WHAT THE FUND SAYS IT WILL BUY

• The cheque: £50,000 to £100,000 into each of three to five companies from a pot that starts at £300,000 and may rise to £500,000.
• The stage: Product, pilot, or sales already in evidence, not a concept looking for its first customer.
• The people: UK-based founders with legal refugee status, and majority-refugee ownership or leadership.
• The extras: Twelve months of coaching, pitch support, and access to industry advisers plus TERN’s network of more than 700 founders.

Sector expertise, a record of getting things done, and a believable buyer or exit in five to ten years sit on the same list. That is standard seed language. The unusual part is the dual-class vehicle that lets TERN block a drift away from refugee founders if later money arrives with different tastes.

All Initial Capital Is Due Out by March 2027

Applications opened on 14 October 2026. TERN expects the first round to close in December and the whole opening pot to be allocated by March 2027. If the three to five companies are chosen on those dates, the test TERN has described since 2023 finally has a start line: priced equity in refugee-founded UK firms, held in a vehicle the nonprofit still controls.

The planned £10 million fund is still a plan. Nothing in the launch materials says it is raised, and the 2024 hire pack already warned that a large close was not certain. Between now and March 2027 the only numbers that will move are the small ones, cheque by cheque.

Disclaimer: This article is news reporting on the launch of a private UK venture vehicle and is for information only. It is not an offer of securities, a solicitation to invest, or personal investment advice, and it does not assess whether any reader should put money into the Refugee Venture Fund, TERN, Skylight Ventures, or any portfolio company. Anyone considering an investment, a loan, or an application should take advice from a qualified financial adviser or solicitor authorised for that work. Capital figures, eligibility rules, and timelines reflect the fund briefing and related research as dated in the piece and may change as the vehicle deploys.