Benefex, a provider of online employee reward and benefit schemes, is the first UK company to receive backing from the bank-backed Business Growth Fund (BGF), securing £4.2 million in growth capital.

The £2.5 billion fund, which began operating in May this year, has taken a minority stake in Benefex as part of the deal. According to a statement from the fund, Benefex’s revenue is growing at more than 50 per cent growth year on year, and continues to expand rapidly with turnover approaching £10 million next year.

Benefex enables large organisations to tailor their rewards and benefit packages to individual employees, communicate online with staff, and outsource administration and support of their schemes.

Matt Waller, a 33-year-old entrepreneur, founded the company at his home in 2003. The company currently provides services to more than 500 clients including the AA, Coca Cola, Bank of America Merrill Lynch, De Beers, E.ON, Philips, MTV and Centrica.

The investment will enable Benefex to expand its product and service lines and extend its international operations, particularly in the US and Asia Pacific. The company also expects to hire about 100 staff members at their headquarters in Southampton, and offices in Marlow and London.

Waller, chief executive of Benefex, comments, ‘We come from entrepreneurial, ambitious roots. We recognised that the business had reached the point where we needed external capital to take it to the next level and invest in key areas. Without it, we would continue to grow but not at the rate that we would like to.’

The BGF has offices in Edinburgh, Birmingham and London, and aims to invest between £2 million and £10 million in small and medium-sized enterprises (SMEs) that have sales between £10 million and £100 million a year. It is backed by Barclays, HSBC, Lloyds, RBS, and Standard Chartered, and was launched after a number of government reports found SMEs were not receiving enough capital.

Stephen Welton, chief executive of the BGF, adds, ‘Benefex is the first of many investments that we will be making in fast growing UK businesses. It typifies the sort of business that we are interested in speaking to.

‘Since our launch we have been actively out in the market talking to business owners and are now seeing a high level of deal flow. It shows a real and growing demand for a long term partner investor.’

Related: Business Growth Fund reaches £1bn invested