The Chancellor of the Exchequer, Rishi Sunak, has recently launched a new £375 million fund to drive investment into research and development intensive companies that are looking to grow within sectors including technology and life sciences.
In contrast to the now closed “Future Fund” scheme, which was intended to support UK-based companies facing financial difficulties, the Future Fund: Breakthrough scheme aims to scale-up innovation and breakthrough technologies. Indeed, the scheme is targeted at fast growing companies rather than fledgling start-ups.
To be eligible, a company must be in the process of raising a minimum investment round size of £30 million (and it must have raised at least £5 million of equity investment in previous funding rounds). As the new Future Fund will only co-invest up to a maximum of 30% in any such investment round, the company must have already secured 70% of the investment round from established private investors. Further details with regards to eligibility can be found on the British Business Bank’s website.
The Government’s backing of R&D focused companies will be welcomed by many UK tech firms, which quite often need to raise considerable capital in order to develop new technologies. Whilst the Future Fund: Breakthrough will no doubt be taken up by a number of companies who fit the relevant criteria, those potential participants will have to consider the implications of the British Business Bank engaging with the company as a significant minority shareholder.
We regularly help fast growing businesses in the technology sector with a range of legal issues. If you would like more information, please get in contact with Jason Varney, Partner at Thomson Snell & Passmore.