British Business Bank’s Future Fund fuels 661 businesses with convertible loans, aiding their growth amid economic uncertainties.
The UK government-established economic development bank, British Business Bank, has released a list of 75 more businesses that the “Future Fund” has stock in, bringing the total number of companies in which the fund is invested at 661.
First announced on May 20, 2020, and accepting applications through January 31, 2021, the Future Fund provided convertible loans totaling £1.14 billion to 1,190 businesses. Additionally, third-party investors had to provide a minimum equal to what the FutureFund did.
The Future Fund provided support to UK businesses whose growth is often financed by equity investments. Through a period of significant economic disruption and the current recovery, the Future Fund helped these enterprises by providing a bridge to the next round of equity fundraising.
“The FutureFund was created to ensure a flow of capital, at the height of the pandemic, to companies that would otherwise have been unable to access government support schemes, while ensuring long-term value for the UK taxpayer,” said Ken Cooper, managing director of venture solutions at the British Business Bank.
“We are happy to see that a large number of those businesses are now raising additional private sector capital, enabling the Future Fund to gain from their success.”
The Future Fund currently owns equity in the following companies: Micrima Limited, a spin-out from the University of Bristol that aims to detect more cases of breast cancer at an early stage; Wales-based Cross-Flow Energy Company Limited, a renewable energy technology company helping businesses across the world leverage the power of “small wind” to support the roll-out of clean, reliable energy solutions; and AstronauTx Limited, a biotech company spun out of University College London that is investigating new ways of treating Alzheimer’s and other neurodegenerative diseases.
Evaluating the effects of the Future Fund
After the first early assessment of the FutureFund was released in 2022, an independent year two assessment has also been released. The analysis employed secondary data to compare the Future Fund portfolio to a counterfactual group, or a group of similar companies, in order to examine performance across various measures.
Although turnover growth, employment growth, and survival prospects were cumulatively lower over 2021 and 2022, the assessment found evidence of a positive impact from the Future Fund on fundraising, and a comparison of valuation to sales data suggests future growth expectations for portfolio companies may have improved relative to the counterfactual.
Additionally, it discovered evidence that the companies in the FutureFund portfolio placed a high priority on research and development, which may have an effect on employment and turnover measures.
At the conclusion of each fiscal quarter, the British Business Bank will additionally update this list of companies in which the FutureFund has an equity interest as well as the list of companies that have declared bankruptcy.
