Britain’s tech startups are getting a tailor-made COVID-19 relief fund.
On Sunday, the UK government unveiled a £1.25 billion ($1.53 billion) rescue package for high-growth businesses, pledging £500 million in loans and £750 million in research funding to keep floundering startups afloat through the coronavirus pandemic. The new package is targeted at tech firms in particular, many of which were unable to tap a previous relief plan.
Blockchain platform startup Chainvine CEO Oliver Oram said his business, like countless other businesses in the UK and around the world, went into immediate crisis mode when economies began grinding to a halt earlier this year. Chainvine builds “frictionless trade” platforms that digitize import and export records for clients including the British government.
“‘We no longer have a budget,’” Oram recalled telling his 20-person team at the start of the crisis, “‘we just have costs.’”
Those costs had to go, and fast, Oram said. “It wasn’t a question of like, ‘OK we budget for this month.’ Everything has to be slashed at the moment because you don’t even know where normality will come back.”
Oram described the need to enact “draconian” belt-tightening measures after the pandemic interrupted Chainvine’s investment stream.
“Future Fund,” the new convertible loan program, will run from May through September with 50/50 backing from taxpayers and the private sector. Loans from £125 thousand to £5 million will go to qualifying non-listed UK firms who have raised at least £250,000 from VCs in the past five years, according to the government fact sheet.
“The UK is a world leader in innovation and at this hugely challenging time, we know that young, fast-growing firms require tailored support to see them through,” UK’s Business Secretary Alok Sharma said in a press release that acknowledged that the government’s earlier funding effort, the Coronavirus Business Interruption Loan Scheme (CBILS),…