The UK government has announced the launch of the London Co-Investment Fund (LCIF) in order to address the funding gap faced by the capital’s tech startups.
The scheme, which has been established by Funding London and Capital Enterprise, will see £25 million invested in 156 seed stage firms in the technology, digital and science sectors over the next three years.
The Mayor of London Boris Johnson has helped contribute towards the £25 million through the London Enterprise Panel’s “Growing Places Fund.”
Crowdcube, an equity crowdfunding platform, has been selected along with its consortium partner Braveheart Investment Group to invest £5 million into high growth businesses as part of the project. Luke Lang, co-founder of Crowdcube explained how the partnership with benefit some of London’s fledgling businesses.
“Working with Braveheart, with its extensive fund management experience, we’re determined to deliver returns for investors and help London’s best technology, digital and scientific start-ups secure the investment they need to expand, create jobs and become the global pioneers of tomorrow,” he said.
The investment should enable firms to make the transition from startup to growth phase more easily, and will focus on companies looking to raise between £250,000 and £1 million. In exchange for the investment, businesses will be expected to contribute towards the LCIF’s target of creating more than 2,500 new jobs. Mayor Boris Johnson outlined the importance of the fund for business and the capital as a whole.
“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,” he said. “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 was officially unveiled today at City Hall by the Mayor’s Office in front of some of the UK’s leading technology entrepreneurs and supporters.