Companies that are growing quickly and focus on “game-changing” technology are invited to apply for a share of a PS375m Fund to encourage innovation in the UK.
The government will be co-investing with private business in the future fund: breakthrough program to help businesses look for capital to support nascent technologies.
The Treasury will promote industries such quantum computing, clean technology and life sciences in the UK to help make it a “science superpower”. This is to stimulate breakthroughs that can “solve some our greatest challenges”.
Rishi Sunak was the chancellor. He stated: “Technology, innovation, will be at center of our future economies which is why our billions are invested in R&D [research-and-development] to help cement our standing as a leader in this area.
“Aboveall, our investment incentivizes collaboration between our best entrepreneurs and private investor, helping to commercialise innovative products such new medicines and green technology that could change our life for the better, all while creating high skilled jobs that help boost UK economy.”
To be eligible, firms must be UK-based and need at least PS30m in order to finance further development.
Private companies will need to contribute the largest amount, while applicants will need to prove that they have secured commitments of at least 70% of their funding round.
Applicants must show they have been able raise PS5m previously without government assistance, indicating they are growing significantly.
The companies won’t apply their own money, instead the lead investor will link the business with the future funds.
Sunak will host in September a tech conference in London under the title Treasury Connect. The event will bring together investors as well business leaders in tech.
Treasury stated that government funding is required in addition to private capital. Because breakthrough technology often requires patience, it will require more money over a longer time period to make significant progress.
The future fund will provide convertible loans of more than PS1bn to 1,190 business owners to help them get through the pandemic.
The government spending on R&D for 2021-2022 is set to surpass PS14.9bn, the highest level since four decades. This is part of an effort by the government to increase investment into innovation to 2.4% economic output by 2027.
Sunak had announced the new future fund in his budget earlier this year. British Patient Capital, British Business Bank’s subsidiary will administer it.
British Patient Capital chief executive Judith Hartley said that “With many world-class Universities and a strong track-record in science and Research, the UK can be fertile ground to create high-growth companies based around cutting-edge technologies.”
“Through the Commercialisation of R&D,” these transformative firms will help accelerate deployment of innovative breakthrough technology that can transform major industry sectors, develop new medicines and support the transition from a Net Zero Economy to a Stronger UK Science Superpower.”