Government innovation fund supports first two businesses

Two small IT firms are the first to benefit from the Capital for Enterprise Fund

Mandelson: small businesses vital

Two small businesses will be the first to benefit from the government's nascent innovation fund, it was announced today.

Communications integrator KeTech will receive £2m and enterprise content governance provider Vamosa will receive £1m from the government's Capital for Enterprise Fund.

The £75m Capital for Enterprise Fund is a joint venture between government and private sector investors and was created to help viable small and medium-sized businesses with growth potential that would otherwise be unable to secure investment.

Business secretary Lord Mandelson said the fund was key to helping the UK recover strongly from the recession.

"Ensuring innovative British businesses can access this sort of risk capital is one of the key commitments from the government’s industrial strategy, New Industry New Jobs," he said.

KeTech Group chief executive John Kearney said the firm's growth had been severely hampered by a lack of credit.

"This will play a critical role in enabling us to secure profitable new contracts which regrettably, until now, we have been forced to turn away," he said.

Vamosa managing director George Knox said the money would help the firm do its job better.

"It is our vision for a Scottish business to ensure multinational organisations and governments receive the highest return on investment from their content assets," he said.

The government is asking businesses whose growth is hampered by lack of access to credit to submit applications for funding.