A new £375m scheme to drive investment in the UK’s most high growth, innovative and R&D intensive firms opened yesterday– in a move designed to super charge the UK’s post-pandemic economy.
Under the UK- wide Future Fund: Breakthrough scheme the government will commit £375 million of funding to fast-growing firms looking to raise at least £30 million of investment. To be eligible, businesses must have commitments of 70% of an investment round from private investors with a track record of financing innovative companies – such as venture capitalists.
The scheme will span across the UK’s world class industries including life sciences, quantum computing and clean technology and accelerate the deployment of breakthrough innovations that could solve some of society’s greatest challenges – from developing life-saving new medicines to technologies that support the UK’s transition to net zero. It is part of the government’s multibillion-pound investment in research and development to help build a future economy, create skilled jobs and cement the UK’s status as a scientific superpower.
In addition, the Chancellor Rishi Sunak today announced that he will host a Treasury Connect tech conference in East London in September to bring together the CEOs and senior leaders of the UK’s biggest tech firms and investors.
The Chancellor of the Exchequer Rishi Sunak said:
Our Future Fund: Breakthrough scheme will enable innovative businesses in every corner of the UK to access the finance they need to scale up and bring their transformational technologies to market – all while creating high-skilled jobs and boosting the economy as part of our Plan for Jobs.
Technology and innovation will be at the heart of our future economy which is why we are investing billions in R&D to help cement our status as a world-leader in this field.
Above all, our investment will incentivise collaboration between our most ambitious entrepreneurs and private investors, helping to commercialise breakthrough products such as new medicines and green technologies that could change our lives for the better – all while creating high-skilled jobs that help boost the UK economy.
Business Secretary Kwasi Kwarteng said:
The support we have provided over the past year is not only helping firms to survive the pandemic, but also driving the growth and jobs of the future, making the UK a global innovation powerhouse.
The original Future Fund was a tremendous success in helping cutting-edge firms to get the fuel in the engine they need to really motor forwards, and we are building on that with the fresh Future Fund: Breakthrough scheme.
Due to high research and development costs, breakthrough technology companies typically require more capital over longer time periods than other companies to bring their products to market.
The UK’s most innovative companies are key drivers of future growth and it is estimated that 1% growth in these firms could grow the UK economy by £38 billion.
In March 2020, the government introduced the Future Fund which successfully supported the high-growth sector during the pandemic so that its potential was not subdued. This scheme provided more than £1 billion of convertible loans to 1,190 businesses to help them through the pandemic.
The government is supporting innovative companies through the Plan for Growth, which includes the Future Fund: Breakthrough, the forthcoming Innovation Strategy and £14.9 billion of spending on research and development, the highest level for four decades.