Government opens £375 million scheme to deliver funding for British startups including tech players, to bolster UK’s post-pandemic economy
The British government today announced a new £375 million scheme to drive investment in “innovative firms of the future”.
The government announced that the new scheme is now open for applications, as the government seeks to kickstart investment “in the UK’s most high growth, innovative and R&D intensive firms” …. “in a move designed to super charge the UK’s post-pandemic economy.”
The fund will involve the government committing to co-invest alongside private enterprise to give extra impetus to businesses looking for cash to take nascent technologies to the next step. And the government is not just targetting tech firms, but also life sciences and clean energy startups as well.
The Government on Tuesday morning said its Future Fund will see it “commit £375 million of funding to fast-growing firms looking to raise at least £30 million of investment.”
In order to be eligible, businesses must be UK based and have commitments of 70 percent of an investment round from private investors with a track record of financing innovative companies – such as venture capitalists.
The companies will not apply themselves, but their lead investor will instead connect the business and the future fund.
And the scheme is not just limited to technology startups, as the government said it will “span across the UK’s world class industries including life sciences, quantum computing and clean technology.”
The government said it is part of it’s multibillion-pound investment in research and development to help build a future economy, create skilled jobs and cement the UK’s status as a scientific superpower.
The Chancellor of the Exchequer Rishi Sunak has also announced today that he will host a Treasury Connect tech conference in East London in September to bring together the CEOs and senior leaders of the UK’s biggest tech firms and investors.
“Our Future Fund: Breakthrough scheme will enable innovative businesses in every corner of the UK to access the finance they need to scale up and bring their transformational technologies to market – all while creating high-skilled jobs and boosting the economy as part of our Plan for Jobs,” said the Chancellor.
“Technology and innovation will be at the heart of our future economy which is why we are investing billions in R&D to help cement our status as a world-leader in this field,” said the Chancellor.
“Above all, our investment will incentivise collaboration between our most ambitious entrepreneurs and private investors, helping to commercialise breakthrough products such as new medicines and green technologies that could change our lives for the better – all while creating high-skilled jobs that help boost the UK economy,” the Chancellor concluded.
The government said that due to high research and development costs, breakthrough technology companies typically require more capital over longer time periods than other companies to bring their products to market.
“The support we have provided over the past year is not only helping firms to survive the pandemic, but also driving the growth and jobs of the future, making the UK a global innovation powerhouse,” said Business Secretary Kwasi Kwarteng.
“The original Future Fund was a tremendous success in helping cutting-edge firms to get the fuel in the engine they need to really motor forwards, and we are building on that with the fresh Future Fund: Breakthrough scheme,” said Kwarteng.
The government noted that the UK’s most innovative companies are key drivers of future growth and it is estimated that 1 percent growth in these firms could grow the UK economy by £38 billion.
The government pointed that it had already set up a Future Fund in March 2020 which has successfully helped the high-growth sector during the pandemic so that its potential was not subdued.
It said this scheme provided more than £1 billion of convertible loans to 1,190 businesses to help them through the pandemic.