The Government has announced the launch of a new £85m fund in London that, over the next three years, will address the funding gap faced by the capital’s tech start-ups.
The London Co-Investment Fund (LCIF) has been set up by Funding London and Capital Enterprise and has also been boosted by Mayor of London Boris Johnson’s Growing Places Fund.
Initially, £25m of the total will be invested in 156 seed stage firms looking for between £250,000 and £1m in the technology, digital and science sectors via the LCIF, while £5m will be invested into high growth businesses.
Speaking at the launch of the fund at City Hall last week, Mr Johnson said that the investment should enable firms to make the transition from start-up to growth phase more easily.
In exchange for the investment, he added that firms will be expected to contribute towards the LCIF’s target of creating more than 2,500 new jobs and that applicants need to show that they can also generate returns of 10 times the initial investment.
As the Mayor explained, London’s tech sector is flourishing, describing the city as “a hotbed of talented young and ambitious people buzzing with exciting ideas” who are setting up new companies in their droves.
However, he added that despite this boom, many budding start-ups find it difficult to raise the finance they need to grow, so he is confident that the LCIF will ensure that 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.