Lon­don and South East lap up lion’s share of bail-out cash

The Daily Telegraph - Business - - Business - By Hannah Boland

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”.

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