A plant-based restaurant, a clean energy company, and a ‘craft’ soft drinks maker are among the first batch of businesses to secure investment from the government’s startup support initiative, the Future Fund.
Yahoo Finance UK has confirmed that vegan restaurant Stem + Glory, craft soft drink brand GUNNA, and wind energy startup Ripple are among the first businesses to receive funding from the Future Fund. Other projects to have secured cash are understood to include a hydrogen car company and a digital wardrobe app.
The Future Fund was launched in May to help support Britain’s innovative startup businesses during the COVID-19 pandemic. The fund lends businesses up to £5m ($6.3m) in the form of convertible loan notes that transform into shares in the businesses if the loans can’t be repaid.
The Future Fund has £250m of government money to lend. Companies must have funding matched by a venture capital investor to qualify, meaning the fund should facilitate at least £500m of investment.
The fund has so far approved loans worth £146m to 155 businesses.
However, the British Business Bank, which runs the fund on behalf of the government, last week said it couldn’t name any of the startups receiving taxpayer cash because of commercial terms. The refusal led to calls for greater government transparency from the head of the Business, Energy, and Industrial Strategy select committee.
Some companies are using crowdfunding platform Seedrs to raise the match funding required for the Future Fund. A spokesperson for Seedrs confirmed to Yahoo Finance UK that six companies raising money on its platform had secured funding from the Future Fund. Four others are waiting for confirmation.
“The process has been very good so far,” Melvin Jay, the founder of GUNNA drinks, told Yahoo Finance UK.
GUNNA, a “craft” soft drink company, is among the six to have secured backing from the Future Fund. The startup has been awarded £130,000 by the Future Fund and raised a further £144,880 on Seedrs.
“The British Business Bank and their team are very professional,” Jay said.
Another company benefiting from the Future Fund is Stem + Glory, which runs two plant-based restaurants in Cambridge and London. The group raised £200,000 from the Future Fund. Stem + Glory chief executive Louise Palmer-Masterston said the process was “painless” and “super fast”.
“We found the application process really easy,” Sarah Merrick, chief executive of Ripple Energy, told Yahoo Finance UK.
Ripple Energy is building a cooperative wind farm project, allowing investors to buy a stake in a yet-to-be-built wind farm and reap the benefit of clean, cheap energy when it is constructed. It too has had its Future Fund application approved.
“We applied for £125,000 and heard back in just 11 working days that our application had been approved,” Merrick said. “It's amazing the government was able to turn it around so quickly.
“The only sensible recovery is a zero carbon one so it's great the government is supporting innovative companies like Ripple to create the zero carbon future people are so keen to see.”
Other businesses understood to have secured funding include digital wardrobe app Save Your Wardrobe and hydrogen-powered car company Riversimple.
Those waiting for confirmation include online business lender Assetz Capital and gym group Fore Fitness.
Keith Morgan, chief executive of the British Business Bank, said in a statement: “In the past week the British Business Bank-run Future Fund has tripled the number of companies approved for convertible loans.
“The rapid build of our open access online transaction process has enabled businesses to gain access to finance through the scheme quickly and efficiently. The scheme plays an important role in providing funding for innovative businesses that are not able to access other forms of support so I am extremely pleased to see so many companies receive their agreements in such short a time.”