The UK tech sector secured a “record-breaking” £11.2 billion in investment last year, a major study has revealed.
The figures, published by HM Treasury, follow the launch of the £375 million Future Fund: Breakthrough scheme, designed to help innovative start ups grow in the wake of the pandemic.
According to the report, the coronavirus pandemic did not hold back the sector as it recorded more than £11 billion of investment in 2020/21.
This has helped the industry grow substantially, now employing more than one fifth of people in cities or around nine per cent of the UK workforce.
HM Treasury says the growth was supported by the landmark Future Fund, which was replaced by the Future Fund: Breakthrough scheme in July this year.
According to the latest statistics, the initiative supported 1,200 high-growth, pre-profit firms that could not access traditional forms of finance. Almost £1 billion was invested in the sector in the form of convertible loans, of which 150 have now converted to equity.
It means the taxpayer has stakes in firms such as healthcare innovator Cipher Surgical Limited and Ripple Energy, a start-up that allows customers to own shares of a wind farm.
The British Business Bank, who administered the scheme, said the fund helped keep investment flowing to high-growth UK businesses during the pandemic.
“Designed to create a bridge to an innovative company’s next funding round, over £1 billion of convertible loans were issued to more than 1,000 firms. Over 150 companies have already seen this funding convert to equity as they have gone on to successfully raise further private sector capital,” said Catherine Lewis La Torre, CEO at the British Business Bank.
Commenting on the figures, the Chancellor of the Exchequer Rishi Sunak said: “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 start-ups.”
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