Government aiming to create a £1billion fund for technology companies
The Government is pushing ahead with a plan to create what it claims will be the “largest technology fund in Europe” to help counter an expected downturn in funding for small businesses and start-ups.
In a statement released on Tuesday, the Department for Business, Innovation and Skills (DBIS) set it is moving ahead with plans to set up the UK Innovation Investment Fund (UK IIF). The scheme is being managed by by a publicly owned company Capital for Enterprise Ltd which is wholly owned by DBIS.
“The UK Innovation Fund was spearheaded by Lord Drayson, Minister for Science and Innovation, to drive economic growth and create jobs by investing in technology-based businesses with high growth potential. The new fund will focus on investing in growing small businesses, start-ups and spin-outs, in strategically important UK sectors including digital and life sciences, clean technology and advanced manufacturing,” the DBIS said in a statement.
The Fund, announced by the Prime Minister on 29 June, will receive public funding from £150 million alongside private sector investment on a “pari-passu basis”, according to DBIS. “It is the Government’s ambition to leverage enough private investment to create a £1 billion 10 year fund,” the government said.
The DBIS claims that the fund is needed to help shore-up funding for UK tech start-ups at a time when private sector investments are under threat. “It will leverage substantial private sector investment and will boost the venture capital and syndication markets in the UK at a time when they are most vulnerable,” the government states.
The government claims that there are about 1,093 venture capital backed technology companies in the UK employing over 40,000 people and that venture capital backed companies “significantly out perform other companies”.