UK gov will reportedly buy stakes in tech startups
The £375 million 'Future Fund: Breakthrough' scheme is expected to be announced during Rishi Sunak's budget this week
The Future Fund, which was first announced in April 2020, was launched as a support scheme for startups impacted by the coronavirus pandemic, and in June 2020 was extended to UK companies that have their headquarters abroad.
The Future Fund: Breakthrough scheme will see the government spend up to £375 million on stakes in later-stage tech startups, with each investment set to range into the "tens of millions of pounds" and be matched by private funds, according to government sources who spoke with the Financial Times.
Due to the high threshold for individual investments, the number of qualified tech startups could be quite limited. For now, the government hasn’t announced how many, nor which companies will make the cut, but more information will likely be revealed on Wednesday when chancellor Rishi Sunak makes his budget 2021 announcement.
Sunak is also expected to provide more detail regarding the Infrastructure Bank, which was first announced in last year’s Spending Review as a £40 billion boost to the UK's gigabit broadband and 5G rollout. The Bank, which is expected to launch sometime in spring 2021, will be supported by an initial £12 billion capital investment as well as £10 billion in loan guarantees, according to reports.
TechUK CEO Julian David described the Infrastructure Bank and the Future Fund expansion as “welcome announcements from the Chancellor ahead of the budget”.
“Ensuring that the new National Infrastructure Bank can invest in digital infrastructure and the new Future Fund: Breakthrough scheme aims to increase investment across the UK will be vital to building an inclusive recovery," David said in a statement given to IT Pro. "Enabling access to world-leading digital infrastructure across the country and providing funding for the next generation of entrepreneurship will be vital to make sure that opportunity and success is not limited by location,” he said.
However, David also warned that if the UK’s 5G rollout is further delayed, it could cost the country “up to £173 billion in growth over the next decade”.
“We also need to ensure that high growth firms outside of London are well supported, as while the Future Fund was a lifeline for many at the height of the pandemic over 60% of funding went to London based firms,” he added.
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