A £1.25 billion government support package to help UK businesses driving innovation & development through the Coronavirus outbreak is now revealed & deemed to be critical to support UK’s strong cyber-security innovation industry.
UK Chancellor of the Exchequer, Rishi Sunak, announced the launch will be soon in May of a £1.25 billion govt. support package to help UK businesses ‘driving innovation and development’ during the current outbreak.
This package includes a £500 million investment fund for ‘high-growth’ companies affected by the crisis, consisting of funding from govt. & the private sector too. Also, SMEs focusing on R&D will gain with £750 million of grants & loans
In his announcement Sunak commented: “This new, world-leading fund will mean they (start-ups & businesses driving research & development) can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.
Alok Sharma, UK Business Secretary, further explained: “Young, fast-growing firms require tailored support to see them through. This wide-ranging package delivers important help that will protect some of the most dynamic sectors of our economy.”
Saj Huq, Programme Director, LORCA, added: “The Future Fund will provide many UK start-ups with the vital support they need to outlive what could be the biggest economic downturn in a generation. However, the UK has sustained itself as a world leader in tech by creating an ecosystem in which only the most innovative survive.
Failure is part & parcel of the innovation process & so we must ensure that funding is meritocratic & does not lower the bar for success among early-stage companies.
“The UK has established a strong cyber-security innovation ecosystem in recent years, leading to the emergence of several industry leaders. Now more than ever, it is critical to nurture them to ensure the resilience of the burgeoning digital sector that our economy heavily leans on. Ease of access to government support will be critical, given the ever-shortening cash runway for cyber-security start-ups and scale-ups. As we have seen with CBILS, this has not always been the case.”
British Business Bank
The fund, delivered in partnership with the British Business Bank & rolling-out May, will provide UK-based companies with between £125,000 & £5 million from the govt., with private investors to at least match the government. Loans will then automatically turn into equity on the company’s next qualifying funding round, or at the end of the loan if not repaid.
Eligibility is that a business must be an ‘unlisted UK registered company’ that has raised at least £250,000 in equity investment from ‘third party investors’ in the last 5 years.
The Govt. is allocating an £250 million initially to fund the scheme, which will be open until the end of September. The scale of the fund will be kept reviewed.
£750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s Grants & Loan Scheme.
Gerard Grech, the CEO of Tech Nation “At this moment of global crisis, the UK must ensure that the tech sector builds on the huge successes it has achieved over the past 10 years, & that it continues to deliver for the economy. In 2019, a massive 33% of all European tech investment was in the UK. We must do everything to keep building on this success story.”
Julian David, techUK CEO also notes: “The businesses that will be supported by these schemes represent the innovative companies of tomorrow. techUK will continue to work with Government to clarify how the schemes will work in practice to ensure the broadest range of companies can benefit from this lifeline.
Innovate UK, the national innovation agency, will accelerate up to £200m of grant & loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers & £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding.
First payments to be made by mid-May.
Sir Mark Walport, CEO UK Research and Innovation, surmises: “As an important part of this support package for innovative firms, Innovate UK will provide immediate cash-flow support to small companies who are developing the products and services of the future, to continue this work throughout the crisis & be an engine for growth once the outbreak is over.”