The UK Government last week published the names of the 158 companies that have converted loans under the £1.1bn state-backed Future Fund scheme into equity. The program, launched in April 2020 by Chancellor of the Exchequer Rishi Sunak, was designed to support startups and innovative companies struggling to secure money during the Covid-19 pandemic.
This is the first time the British Business Bank, a government-owned business development bank, has listed the firms that received special taxpayer-backed loans. The financial backing comes in the form of convertible loans, giving the UK government an equity share in the business when the loan is eventually converted.
To be eligible, the businesses had to be an unlisted UK registered company and have raised at least £250,000 in equity investment from private, third-party investors in the past five years.
“The Future Fund was set up to ensure that investment keeps flowing to our most innovative businesses, and it’s fantastic that taxpayers now have equity in these top-performing startups,” Sunak said In a statement accompanying the release of the British Business Bank’s data. “Investing in these companies has the potential to accelerate innovations that will transform UK industry, develop new medicines and strengthen our position as a science superpower.”
When the scheme was launched, it came under fire from skeptics wondering whether the government should be investing in loss-making businesses during a pandemic; The Future Fund was also criticised for focusing heavily on the VC portion of the investment landscape.
Others argued it failed to cater to diverse and regional founders – 90 of the 158 companies are in London – and was incompatible with The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS). Those two UK government initiatives encourage innovation by giving private investors a significant tax break when investing in early stage, ‘high-risk’ companies.
These are some of the tech companies that have benefited from the scheme:
Engage is an end-to-end workforce management platform that connects recruitment agencies, end-hirers, and contractors. Its cloud-based solution creates visibility across the recruiting process, ensuring worker compliance and helping companies mitigate tax liability risks.
Its back-office solution offers automated registration, compliance, attendance, and pay to reduce the amount of paperwork and spreadsheets that have to be filled out. This allows users to instead focus on meetig their targets.
Kano Computing provides a system of kits and coding platform that enables users to develop apps, games, and music. Primarily aimed at children, the says it makes “technology for creation, not just consumption.”
Founded by Alex Klein, the company raised raised a $28m Series B in 2017, but reportedly lost around half of that in 2019. Despite a difficult couple of years, the company recently partnered with musician Kayne West to create a Stem Player that allows users to not only listen to West’s new album but also customise each song. Listeners can control the mix of the vocals, drums, bass and add effects to the songs.
Founded in Bristol in 2016, Perceptual Robotics uses intelligent automation to make wind turbine and other infrastructure inspections more efficient. Its custom-built Unmanned Aerial Vehicle (UAV) gives inspection engineers a cost-effective tool that helps them increase the number and quality of inspections,, whilst minimising health and safety risks.
The UAVs can identify lightning strikes, cracks, erosion, and delamination, and highlight anything out of the ordinary. The consistent data capture allows for long term analytics from data mining massive amounts of information to inform operation and maintenance decision making.
Launched in 2016, Pycom is an Internet of Things (IoT) company that has pioneered an innovative IoT platform that offers a suite of hardware and software products to connect developers, enterprises, and consumers. By creating an ecosystem between connectable things, the company says it can reduce barriers and time to market.
To date, Pycom has attracted more than 29,000 customers in 87 countries and has attracted more than 500,000 developers to its global developer community.
Robin AI is a London-based legal tech company that offers an automated contract review service. Clients send their inbound contracts, and Robin AI will use a combination of technology and legal specialists to review and edit those documents according to the client’s specifications.
By employing a combination of machine learning and human intelligence, Robin AI said i can save time and costs by automatically reviewing detailed legal contracts such as NDAs.
The company’s current clientele includings legal firms Clifford Chance and Foot Anstey, PE funds like Hayfin, and businesses like Pizza Hut and Babylon Health.
In a world where mental health is becoming increasingly de-stigmatised, digital mental health support services are seeing a boom in popularity. Spill describes itself as an “all-in-one mental health support for employees,” providing users with the ability to figure out whether they need — and if so, book — therapy sessions, all via an app.
Spill also helps to train managers to be more emotionally intelligent, offering therapist-led group sessions on how to handle tricky emotional situations, support employees with their mental health, and balance the need to manage performance with managing feelings.
The app is already being used by companies like Bulb, Typeform, Depop, and Citymapper and in January raised a £2m seed round.