The government’s future fund successor scheme has officially launched, with a pool of £375m to be distributed to innovative tech companies in the UK.
Future fund: breakthrough was originally announced in Chancellor Rishi Sunak’s Budget in March. Its purpose is to deliver scale-up funding to technology companies which are investing in research and development (R&D), as well as innovations such as quantum computing, cleantech and artificial intelligence (AI).
British Patient Capital will distribute the funds and it will construct a portfolio of growth-stage breakthrough technology companies over time.
“With many world-class universities and a strong track record in science and research, the UK is fertile ground for creating high-growth companies based on cutting edge technologies,” said Judith Hartley, chief executive of British Patient Capital.
“Through the commercialisation of R&D, these transformative companies will help accelerate the deployment of innovative breakthrough technologies that can transform major industries; develop new medicines; support the transition to a net zero economy and strengthen the UK’s position as a science superpower.
“Future fund: breakthrough will enable these R&D intensive companies to raise the patient capital they need to fuel the later stages of their growth, and in doing so, help ensure the UK is a world leader in the industries of the future.”
The fund will be open to any technology company which is raising a minimum total investment round size of £30m. The fund will contribute a maximum of 30 per cent to the funding round, meaning that the minimum amount of private sector funding will be £21m.
The company must have raised at least £5m of equity investment from third-party investors in previous funding rounds. Future fund: breakthrough will invest on the same terms as private sector investors.
The funding scheme has been welcomed by industry stakeholders, as a tool to help ensure the UK economy’s recovery by investing in innovative fintech markets.
“As the potential of technologies like AI, machine learning and quantum computing become fully realised and applied at scale, R&D funding is more important than ever to turn the UK’s new breed of innovators into game-changing market leaders,” said Gerard Grech, chief executive of Tech Nation.
“Funds focused specifically on R&D intensive companies aligned to the UK’s strategic sectors, including net zero companies, will help to tackle some of the biggest challenges facing society today. It will open up new job opportunities, drive economic growth, and cement UK Tech as world-leading.”