London and South East lap up lion’s share of bail-out cash
START-UPS based in London and the South East have scooped almost three quarters of the Government’s tech bailout cash, as the size of the Future Fund continues to balloon.
Figures from the Treasury released this morning show that £381m of the total £642m which has been awarded to companies under the Future Fund scheme has gone to firms in London. Another £91m has been dished out to start-ups in the South East.
The scheme allows for start-ups which have previously received £250,000 in equity from third-party investors and which are based in the UK, to access convertible loans as large as £5m from the Government. These loans, which require matched funding from outside investors, will almost all convert into equity on a company’s next funding round.
London is home to around a fifth of UK businesses, although it has attracted a higher proportion of digital companies, and many of Britain’s fastest growing start-ups.
A report from Tech Nation this year said there were 43 firms in London valued at more than $1bn (£750bn). The North East had one digital “unicorn”, while the North West had five.
The Government has previously signalled plans to create more startups outside of the capital. In the Budget in March, Rishi Sunak, the Chancellor, said there would be “incremental funding into high quality research, with much of that funding going to brilliant universities around the country”.