LONDON, United Kingdom — The British government has announced a further £1.25bn fund to help ‘innovative’ companies in the UK survive the coronavirus pandemic.
The scheme includes both a £500m investment fund, aka the “Future Fund”, for high-growth companies impacted by the COVID-19 virus, and £750m of targeted support for SMEs focused on research and development.
The aim is that the extra funding will ensure firms in some of the most dynamic sectors of the UK economy are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
“Britain is a global leader when it comes to innovation. Our startups and businesses driving research & development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis, “ commented Chancellor of the Exchequer, Rishi Sunak.
“This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Launching in May, the Future Fund scheme will be delivered in partnership with the British Business Bank, providing between £125k and £5m from the government. However, businesses will need to secure an equal or greater amount of match funding from private investors.
To be entitled to investment, businesses must also be UK-based and have previously raised at least £250,000 in equity investment within the last five years. The treasury has also stated that loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid.
Applications will initially be open until the end of September, with further details on the scheme and full eligibility criteria to be published by the government in due course. The £750 million of targeted support for the most R&D intensive small and medium-sized firms, meanwhile, will be available from May through Innovate UK’s grants and loan scheme.
Reacting to the news Will Shu, founder of Deliveroo commented: “It’s great news that the Chancellor is supporting British startups that are innovating and will be so vital to the UK economy in the months and years ahead with such a practical and thoughtful scheme.”
Brent Hoberman, Founders Forum, Founders Factory, firstminute capital Co-Founder and Executive Chairman added: “The capital being made available under the Chancellor’s programme should also serve as a powerful catalyst to the unlocking of private support, which together, will provide essential funding to worthy early-stage companies to help them get through the current crisis.”