Coronavirus: Government urged to name tech startups backed by Future Fund

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The Future Fund was announced by Britain's business secretary, Alok Sharma. (Tolga Akmen/AFP via Getty Images)

The government is being urged to make public the names of startups backed with taxpayer cash through the Future Fund.

The Treasury this week said that 53 startups had received £55.9m ($71.4m) from the Future Fund, which was set up last month to help startups survive the COVID-19 downturn.

The fund distributes cash through convertible loan notes — loans that convert into shares if the business cannot pay it back. It means the government may end up with stakes in the startups backed by the fund.

The startups have not been named despite receiving state support. The British Business Bank, which administers the Future Fund, said they couldn’t be disclose due to commercial terms.

Read more: UK startups get £1.25bn COVID-19 support from government

Darren Jones MP, chair of parliament’s Business, Energy and Industrial Strategy Select Committee, told Yahoo Finance UK the businesses should be made public so that the government could be held accountable.

“When government grants funding to companies it’s often normal for the recipients of those companies to be published, for example when Innovate UK or the Defence and Security Accelerator grants awards,” Jones said.

“While I understand there may be commercial sensitivity around the details of the award, it would seem odd that convertible loans — where government may end up as a shareholder — are not reported. 

“Indeed, I am keen to understand where such funding is going, especially in tracking support for companies outside of London and, for example, to female entrepreneurs. If these details aren’t published how can we know who got what and why?”

Read more: UK government gives businesses £100bn helping hand

A spokesperson for the British Business Bank said: “For commercial confidentiality reasons, the Future Fund can not disclose the identity of the companies in receipt of funding without their approval.

“The companies that have received funding may disclose their identity at their discretion.”

The Future Fund has a total of £250m in government cash to invest and 533 startups have so far applied to the fund. Successful candidates must have matched funding from a private venture capital investor, meaning the Future Fund should facilitate £500m of investment.