The UK Government could be poised to offer more financial support for late-stage tech startups as part of the Future Fund: Breakthrough scheme, an extension to last year’s Future Fund support package.
According to a report in the Financial Times, the new scheme would see the government spend upwards of £375 million snapping up stakes in high-flying tech firms.
Chancellor Rishi Sunak is expected to reveal the plans on Wednesday during the 2021 budget announcement.
Stakes in individual companies could reach “tens of millions of pounds”, according to the FT report, with government investment matched by private funds.
It is believed the number of startups eligible for support via the scheme will be low and fewer will receive funding compared to the initial Future Fund scheme.
First announced in April 2020, the Future Fund was introduced to support startups during the coronavirus pandemic through a combination of government and privately-matched funding.
Commenting on the launch of the fund last year, Sunak said: “Our start-ups and businesses driving research and development are one of our great economics strengths, and will help power our growth out of the coronavirus crisis.”
It appears the Chancellor intends to continue support for Britain’s startups as the country emerges from the coronavirus pandemic. While more details on the Future Fund: Breakthrough scheme are expected to be revealed by Sunak on Wednesday, sources told FT the expanded initative will be primarily aimed at more “mature companies” operating in key sectors such as life sciences or companies specialising in quantum computing and clean tech.
Companies operating in these spaces often lack access to funding which helps them adequately expand and compete on a global scale, and many are subsequently acquired by overseas firms.
More than £1 billion has been invested in startups since the launch of the Future Fund last year, with upwards of 1,000 startups benefitting from the scheme.
In some instances, government loans via the scheme have already been converted into equity stakes, meaning the taxpayer is a shareholder in several companies including a broadband provider and reusable cup manufacturer.
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Support for Britain’s tech sector and startup scene is expected to feature heavily in the upcoming budget announcement.
Last week, the UK Government revealed plans to introduce a fast-track visa scheme that will enable UK-based firms to attract more high-skilled overseas workers.