Start-ups voice concern over state support
THREE quarters of financial technology start-ups are unhappy with the amount of government help during the pandemic, according to a survey.
The report from the Digital Finance Forum found that only 25pc of founders believed that the Government had done enough to support digital banking businesses.
Current support such as the Future Fund, which tops up investments into businesses, as well as the Bounce Back Loan scheme, business interruption loans and the furlough scheme were not enough to properly sustain financial technology businesses, the survey found. Out of the executives who responded to the survey, 90pc of them believed the pandemic had made it harder to raise funding in the next year.
And 67pc of executives believe their views are not properly heard by policymakers and regulators.
Founders told the survey they wanted loosened rules on state-backed investment schemes, as well as more engagement by the Government.
Lending schemes during the pandemic “were unduly tailored to banks”, according to some start-up executives who said they believed that banking start-ups were an “afterthought”.
Almost a third of businesses surveyed said they had made use of the furlough scheme to reduce costs.
It comes as some digital banks have warned of slowing growth and uncertainty. Challenger bank Monzo said in June that its valuation had collapsed from £2bn to £1.25bn as part of a £60m funding round. It said in July that the pandemic had caused “material uncertainties” about its operations.