London tech scene receives £85m from UK government
The UK government has launched a new scheme called the London Co-Investment Fund (LCIF) in an attempt to fix the funding problem experienced by the capital’s tech start-ups.
Established by Funding London and Capital Enterprise, the project has secured £25 million to be invested in over 150 seed-stage firms in the technology, digital and science sectors over the next three years.
Another £60 million will be provided by six private sector partners: Wellington Partners, Playfair Capital, London Business Angels, Angel Lab, Firestartr, and Crowdcube/Braveheart Consortium.
These were chosen based on their past knowledge of investing in the three sectors.
Businesses lack funding after exiting support programmes
John Spindler, CEO of Capital Enterprise and co-founder of the London Co-Investment Fund, said: “We explicitly wanted investors that reflected the diversity of interest and expertise that can be found in London’s investor community.”
The largest present gap in the investment market is in businesses just emerging from support programmes. This new initiative should ease the transition from start-up to growth phase currently being experienced by small firms.
Boris Johnson backs move to help start-ups
“London’s tech sector is flourishing and the city is a hotbed of talented young and ambitious people buzzing with exciting ideas who are setting up new companies in their droves,” said London mayor Boris Johnson.
He added: “Despite this boom, we know that many budding start-ups find it difficult to raise the finance they need to grow. This new fund will ensure the tech-giants of the future can get the support they need to bring their ideas to reality and deliver jobs and growth for the capital.”
The LCIF aims to make its first investment in January 2015, and will co-invest alongside its partners at a rate of one investment per week for three years.