Finance South West Growth Fund and South West Ventures Fund, both managed by venture capital house YFM, contributed to the fundraising.

John Steven, owner of Wykeham Inns, says: ‘Our business started just under three years ago and we have grown steadily to our current seven properties.

‘We have been delighted with the support and approach taken by Finance South West; decisive, straight talking, no-nonsense, and all agreed in a matter of weeks.’

The company, which runs five gastropubs, a restaurant and a boutique hotel, has now begun a £600,000 conversion of a former glass-blowing works in Plymouth. It intends to open its restaurant in the venue before Christmas this year.

Finance South West Growth Fund is supported by the European Regional Development Fund and backs companies in certain areas of South West England. It offers investments of between £20,000 and £1 million in the form of loans, equity finance or a mixture of the two. To date it has invested £4 million in nine companies.

South West Ventures Fund is one of the nine Government-backed regional venture capital funds. Initial investments are limited to £330,000.