Start-ups voice con­cern over state sup­port

The Daily Telegraph - Business - - Technology Intelligen­ce - By James Cook

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.

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