Britain’s Chancellor of the Exchequer Rishi Sunak takes part in a national ‘caregiver applause’ to acknowledge the work of Great Britain’s National Health Service (NHS) workers and front-line medical staff across the country while fighting the coronavirus pandemic, on the stairs. from the Foreign and Commonwealth Office (FCO) on April 16, 2020 in London.
Tolga Akmen | WPA Pool | fake images
The UK government now has stakes in 158 startups after a series of taxpayer-funded loans turned into shares, state-owned British Business Bank announced Tuesday.
Concert ticketing app Dice FM, artisan soda brand Gunna, and DIY computer kit provider Kano are among the companies in which the government owns shares.
The Future Fund was launched by UK Finance Minister Rishi Sunak in April of last year as part of an effort to support British companies that had been crippled by the Covid-19 shutdowns. The rescue package was expanded last june to include companies based abroad. Startups were able to apply between May 2020 and January 2021.
The British Business Bank, which runs the so-called Future Fund program, said it has issued convertible loans to 1,190 companies worth £ 1.14 billion ($ 1.58 billion).
Convertible loans are converted to equity interests in the next round of startup financing; the theory is that this allows the government to get a return on investment later on.
As of August 31, 158 of the loans had been converted into shares, indicating that the companies have raised more capital from the private sector through a round of equity financing.
Of the 158 loans that have been converted into shares, 90 are for London-based companies, while only four are for companies in Wales.
Ken Cooper, Managing Director of Risk Solutions at British Business Bank, said in a statement: “The Future Fund was created to increase the flow of capital to innovative companies at the height of the pandemic, while ensuring long-term value. deadline for UK taxpayer. “
“As a shareholder in so many promising businesses, Future Fund is well positioned to support and benefit from their continued growth,” added Cooper.
However, not everyone thinks that taxpayer funding should have been used to help struggling start-ups.
Robin Klein, co-founder of venture firm LocalGlobe, said last year that the Future Fund “runs the risk of diverting much-needed capital to the wrong part of the economy.”