The Government has announced the launch of the Future Fund: Breakthrough funding programme and is now open for applications.

What is the Future Fund: Breakthrough?

The £375 million funding programme aims to aid tech start-ups who are highly innovative and can accelerate the deployment of breakthrough technologies, develop new medicines, and support the UK’s transition to a net-zero economy.

The programme will be funded through the British Patient Capital (BPC), a subsidiary of the British Business Bank.

The funding programme will involve co-investment by BPC (by way of equity) and private investors targeting R&D intensive companies looking in the UK looking to scale up in industries such as quantum computing, life sciences and clean technology.

Key features of the Future Fund: Breakthrough

Investors will have to meet certain requirements including:

  1. As an investor-lead programme, the application must be made by the lead investor. They must complete an online application and investment will be subject to the below process:
    • BPC assess the eligibility of the lead investor (specific criteria must be met);
    • The lead investor then introduces the potential investee company to BPC;
    • BPC will thereafter assess the company’s eligibility for the funding;
    • BPC then evaluates the investment opportunities; and
    • The BPC Investment Committee will then make a final decision.
  2. Companies must be carrying out R&D by meeting the following three criteria:
    • R&D spending of at least 10 per cent of the total operational costs over the last 3 years or at least 15 per cent in one of the past 3 years;
    • Development of defensible intellectual property in the UK which is expected to be its main source of revenue; and
    • It is intended that 20 per cent or more employees will carry out research for at least 3 years from the date on the investment in roles requiring a master’s degree or higher.
  3. Companies must be UK based with significant operations in the UK i.e. at least half of its employees and researchers are based in the UK.
  4. Companies must be raising a minimum total investment round size of £30 million, and the Future Fund: Breakthrough will contribute a maximum of 30% to the investment round. This means companies must have commitments of 70% from private investors such as venture capitalists.
  5. Companies must have also raised at least £5 million of equity investment in previous funding rounds.

NB: The funding programme is separate from the government’s Future Fund (applications for this are now closed) and companies’ participation in the Future Fund shall not have an impact on their eligibility nor affect their likelihood of obtaining funding under this programme.