The U.K. Chancellor Rishi Sunak has extended the remit of the investment fund launched for high growth companies impacted by the coronavirus to capture U.K. businesses that shifted their headquarters abroad to obtain historical backing.
The Future Fund has opened up to businesses that have been supported by accelerator programs like Y Combinator and Techstars Ventures, some of which require businesses to set up parent companies outside of the U.K. if they are to access seed or venture capital funding, mentorship, and other support.
To be eligible, companies must have participated in an accelerator program that required them to shift their parent company on or before April 19. At least half of a company's employees must be U.K. based, or at least half of its revenues must come from U.K. sales, too.
The Future Fund provides loans to investment-dependent companies that have raised at least £250,000 in equity in previous funding rounds in the five years to April 2020, and can secure matched funding from third-party investors. The loans of between £125,000 and £5 million will convert to equity unless the loan is repaid.
The government initially made £250 million available for the fund, with third party investors matching this amount. Due to its popularity, funding has increased since its launch on May 20, and the government has approved over £320.6 million of convertible loans to 320 businesses as at June 28, according to the state-owned economic development bank British Business Bank PLC, or BBB, which is delivering the fund. The government is keeping the scale of the scheme under review, it said in a release.
Applications will be assessed against "U.K. Government investment standards on specific jurisdictions by reference to factors such as sanctions, tax transparency, and the cost and complexity of implementation," the BBB said in its release.