By Daniel Hunter
The Mayor, Boris Johnson, has announced a £22 million equity fund designed to help to small and medium businesses grow in the capital, helping to create or safeguard more than 400 jobs.
Small to medium enterprises (SMEs) play a vital role in the capital’s economy, representing 50 per cent of the workforce. The Mayor has committed to support this entrepreneurial sector so it can thrive even in tough economic times.
Access to finance can be a key barrier to growth and this new fund will provide financing for early stage businesses with a particular focus on software for financial services; creative industries; the ‘digital economy’; leisure; education; and healthcare. It is estimated that the funding could support around 420 jobs over the next two years.
The innovative fund will lever in private sector investment using £10million of City Hall controlled funding, including the European Regional Development Fund, in order to offer financial support to small, fast-growing companies. Equity fund managers MMC Ventures has been appointed to run the initiative and will attract further private funding taking the total value of the funding pot to at least £22million.
"London's small to medium companies are a vital component of this city's economy, supporting significant numbers of jobs," The Mayor, Boris Johnson, said.
"It is a top priority for me that these entrepreneurial enterprises receive practical support to thrive and grow, not least as many have the potential to become major employers in the future. This innovative equity fund is using public and private money in order to offer much needed financing when more traditional routes are not available."
The Deputy Mayor for Business and Enterprise, Kit Malthouse, launched the fund at a City Hall event today.
"We've listened to London's small business owners and know that getting access to finance can be challenging," he said.
"This fund will invest money to support fast growing businesses today, using returns from the investments to support even more companies in the future. This is a win-win for all involved."
The Mayor and MMC Ventures confirmed the first tranche of businesses to receive financing under the programme. These are:
• Masabi provides mobile ticketing solutions to travel operators. Its main target is the transit market principally trains (commuter rail and metro systems), followed by near-term deployments on buses and boats. It is focused on providing end-to-end solutions for transit operators with complex needs;
• Love Home Swap is an international holiday home exchange website, providing members with the opportunity to swap their home with residences in more than 100 countries. Love Home Swap is now Europe’s biggest home exchange site & set to be global market leader by the middle of the year;
• MBA & Company provides both corporates and SMEs with instant access to high-end advisory and research work, through an online network of 16,000 highly qualified freelance consultants - with 5 years plus experience and an MBA / MSc or PhD from top schools. Access to this network significantly reduces the cost of projects, as well as providing a flexible source of talent to work onsite or around the globe;
"We are delighted that the Mayor has backed the MMC London Fund. We have already invested the new London Fund in 5 very exciting London companies," Bruce Macfarlane, Managing Partner at MMC Ventures, said.
"MMC specialises in sectors where the UK is a world leader and we are so fortunate in London to be the world centre of so many dynamic industries. We’re looking to back entrepreneurs who will be leaders in their industries and London is brimming with talent.’
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