Future Fund extended to UK Companies from Accelerator Programmes outside the UK

Press release 30 June 2020

The Chancellor of the Exchequer today announced that the Future Fund is being expanded to accommodate businesses that contribute significantly to the UK economy, but do not have their parent company based in the UK because they participated in a non-UK based accelerator programme.

Accelerators are open and competitive programmes which are designed to select and foster the stars of tomorrow. They are selective, have a fixed-term and are a cohort-based programme for early stage companies, offering access to industry mentorship, seed or venture capital and other professional support. Part of the conditions of joining some accelerator programmes outside of the UK is that the businesses are required to create a non-UK incorporated parent company.

These changes to eligibility will allow a wider number of suitable companies to apply, while maintaining scheme protections against fraud and abuse and ensuring that the Future Fund continues to support economic activity in the UK.

Eligibility criteria

A non-UK ultimate parent company of a corporate group which participated in an Accelerator Programme on or before 19 April 2020 may be eligible for the Future Fund, provided that the company has satisfied the following:

  • the Company must have raised at least £250,000 in equity from third-party investors in previous funding rounds in the last five years (from 1 April 2015 to 19 April 2020, inclusive);
  • if the Company is a member of a corporate group, it must be the ultimate parent company;
  • the Company is the equivalent of a UK limited company in the relevant non-UK jurisdiction;
  • the Company does not have any of its shares or other securities listed on a regulated market, a multilateral trading facility, a recognised investment exchange and/or any other similar market, stock exchange or listing venue
  • it participated in an Accelerator Programme, on or before 19 April 2020, and participation in the Accelerator mandated incorporation of the ultimate parent company in a non-UK jurisdiction;
  • if the Group (or any entity within the Group) was in existence before the Company was incorporated, the ultimate parent company of the Group (or the sole entity, if applicable) must have been incorporated in the UK;
  • the Company is the ultimate parent company of a Group which has:
    • half or more of its employees based in the UK; or
    • half or more of its revenues from UK sales;
  • it is the ultimate parent company of a group which contains at least one subsidiary operating company incorporated in the UK on or before 31 December 2019; and
  • the Company received investment from the Accelerator Programme on or before 19 April 2020.

The Future Fund, which was developed by government and delivered by the British Business Bank launched in May and will initially be open until the end of September. As at 28 June, the Future Fund has approved £320.6m of convertible loans to 322 innovative businesses across the UK.

Operating on a commercial basis, the Future Fund unlocks additional third-party investment on a match funded basis, creating a bridge to the next equity funding round for innovative companies with good potential. Initially, £250 million was made available by the government for investment through the scheme, to be matched by private investors, with the Treasury making clear the amount could be increased if needed. Due to the popularity of the Fund, more funding is being made available. The scale of the scheme will be kept under review.

To protect the use of public funds, all applications will be assessed against UK Government investment standards on specific jurisdictions by reference to factors such as sanctions, tax transparency, and the cost and complexity of implementation. The Government will also take into account concerns around the proper use of public finances and wider public policy risks, as well as whether investment would undermine the integrity or public credibility of the Future Fund.

All investment funds being matched need to be in pounds sterling and all payments will be made in pounds sterling.

This technical extension to the Future Fund may mean that for these new companies applying, the assessment of an application involving a non-UK parent company may take additional time to complete due to the need to assess and review documentation received, additional checks that may need to be undertaken and the need to assess information from parties in other jurisdictions.

Further Information

Notes to editors

Future Fund

The Future Fund will support the UK’s innovative businesses currently affected by Covid-19. These businesses have been unable to access other government business support programmes, such as CBILS, because they are either pre-revenue or pre-profit and typically rely on equity investment. The scheme will deliver an initial commitment of £250m of new government funding through convertible loan notes which will be unlocked by private investment on a match funded basis. Developed by government and delivered by the British Business Bank, the Future Fund launched for applications in May and will initially be open until the end of September.

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses:

The British Business Bank Finance Hub provides independent and impartial information to high-growth businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. The new site also features case studies and lessons from real businesses to guide businesses through the process of applying for growth finance.

As the holding company of the group operating under the trading name of British Business Bank, British Business Bank plc is wholly owned by HM government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, none of which are authorised and regulated by the FCA.

British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.