The UK Government’s £375 million Future Fund: Breakthrough scheme has opened for applications, with high-growth tech firms invited to contend for a share of funding.
The fund, announced in the 2021 Budget, will see the government invest in high-growth, R&D-focused firms alongside private enterprise.
Notably, the scheme will focus heavily on tech companies operating in breakthrough sectors, including life sciences, quantum computing and clean technology.
Chancellor Rishi Sunak said the fund will “incentivise collaboration” between the country’s tech sector, entrepreneurs and private investors.
“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,” he said.
“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,” he said.
To qualify, firms must have previously raised private investment without state assistance and intend to raise at least £30 million through the breakthrough fund.
“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 government said in a statement.
Additionally, applications must be made by a lead investor, with the process facilitated by British Patient Capital, a subsidiary of the British Business Bank.
The Future Fund: Breakthrough scheme forms part of the government’s Plan for Growth and its multibillion-pound focus on supporting research and development.
Government spending on R&D is set to hit £14.9bn from 2021 to 2022, marking the highest level of investment in four decades. By 2027, the government aims to increase total public and private R&D investment to around 2.4% of GDP.
Due to high costs, R&D-intensive companies typically require more capital over a sustained period to bring products to market.
“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, CEO of British Patient Capital.
Hartley added that government support for “transformative companies” will help strengthen the UK’s position as a global “science superpower”.
- Brand phishing attacks | How to spot them and stay safe online
- UK accuses China of “cyber sabotage” for role in Microsoft Exchange attack
- Pioneering Heriot Watt research project to gather untapped bridge energy
While the breakthrough fund is separate from the government’s Future Fund, it does build on the original scheme.
In March 2020, the government unveiled the Future Fund, which supported high-growth firms during the coronavirus pandemic. To date, the scheme has provided at least £1 billion in loans to more than one thousand UK businesses.
“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,” said Business Secretary Kwasi Kwarteng.