The Future Fund

The Future Fund was a significant UK government-backed initiative, launched in May 2020, specifically designed to support innovative UK companies during the economic uncertainty caused by the COVID-19 pandemic. Managed by the British Business Bank, its primary objective was to ensure that high-growth businesses, particularly those reliant on equity investment, could continue to access the capital they needed to survive and thrive. It aimed to bridge the funding gap for companies that might otherwise struggle to secure private investment during the crisis.

The fund operated by providing convertible loans, ranging from £125,000 to £5 million, which required matching investment from private third-party investors. This co-investment model was crucial, as it ensured that the government's support was leveraged by private capital, aligning interests and validating the investment potential of the recipient companies. The convertible loan structure meant that the government's investment would convert into equity at a future qualifying funding round, allowing taxpayers to benefit from the success of the supported businesses.

By the time it closed to new applications in January 2021, The Future Fund had committed a substantial £1.14 billion in funding across 1,190 UK companies. This widespread support helped a diverse portfolio of startups and scale-ups navigate the challenging economic climate, preserving jobs and fostering innovation. The initiative played a vital role in stabilizing the UK's venture ecosystem during an unprecedented period, demonstrating the government's commitment to its high-growth tech and innovation sectors. Its legacy continues as the British Business Bank manages the portfolio of converted equity stakes and outstanding loans.