Mayor launches fund to help budding London tech start-ups

Budding tech and science start-up businesses in the capital who are looking to raise the finance they need to take their business to the next level can now take advantage of a venture capital fund for small businesses.

The London Co-Investment Fund is supported by £25m from the Mayor of London and up to £60m from six private sector partners. Over the next three years the London Co-investment Fund is expected to invest in more than 150 small businesses plus spur the creation of up to 2,600 new jobs.

Independent research into small businesses has found that, although the capital’s tech sector is thriving, some smaller companies find it difficult to line up new investment to help them expand. The new Fund specifically targets small businesses with expertise in the science, technology and digital arenas who have experienced those difficulties, and who will typically be looking to raise investment of between £250,000 and £1m.  According to the research that is the largest gap in the market for investment.

Businesses wishing to apply will need to demonstrate they have the potential to create new jobs and be capable of delivering financial returns of ten times the cash invested in them.

The Mayor of London, Boris Johnson said: “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. 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 Mayor of London is contributing £25m towards the scheme through the London Enterprise Panel’s ‘Growing Places Fund.’ The six private partners have been selected following a year-long process. They are: Wellington Partners, Playfair Capital, London Business Angels, Angel Lab, Firestartr and Crowdcube/ Braveheart Consortium.

The London Co-Investment Fund will be managed by Funding London. The initiative was originated by, and developed in partnership with, Capital Enterprise (the membership body for universities, accelerators and incubators that support entrepreneurs in London). Capital Enterprise on-going role will be to lead on the promotion of the London Co-Investment Fund and to develop and run a pipeline of investment-ready tech businesses that will be referred to the Fund’s selected co-investment partners.

To apply for London Co-Investment Fund investment and to receive support and guidance, London based Tech Start-ups  are advised to go to www.lcif.co.

LCIF hopes to make its first investment in January and will co-invest alongside its partners at the rate of one investment per week for three years.

Click here to read the full press release.

Date: 4^th December 2014