Government launches £1bn technology investment fund

The fund will aim to help promising small businesses

A £1bn government-backed venture capital fund has been launched to invest in technology businesses with high growth potential.

The fund will target small firms, startups and spin-outs, in the fields of digital and life sciences, clean technology and advanced manufacturing.

Fundraising for the innovation investment vehicle, which is part of the government’s Building Britain’s Future policy programme, could last up to a decade.

Some £150m will be provided by a pool of backers comprising private sector organisations, the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and the Department of Health.

According to prime minister Gordon Brown, the fund will provide much-needed support for promising startups and small businesses at a time when they need it most.

“Venture capital finance is the lifeblood of innovation and crucial to ensuring the commercialisation of the discoveries coming out of our research base. The fund will boost future UK competitiveness,” said Brown.

Access to venture capital can work as a route for boosting innovation in the UK as well as job creation, said Lord Mandelson, secretary of state for business.

“The UK Innovation Investment Fund will be a shot in the arm for the British venture capital industry,” said Mandelson.

“It is also a challenge to UK venture capitalists to follow the government’s lead in backing British entrepreneurs in building exciting new companies, investing in new technologies and creating jobs,” he said.