ImpactAlpha, June 5 – London-based tech investor MMC Ventures and social enterprise lender FSE Group have clinched £100 million ($127 million) from London’s Mayor’s office to advance the city’s startup scene. The commitment from London is part of Mayor Sadiq Khan’s £100 million Greater London Investment Fund to cultivate entrepreneurship in the city.
“Small businesses are the lifeblood of our economy – they account for more than 99% of all businesses in the capital and support more than half of all jobs,” Khan said in a statement.
The initiative is intended to foster and grow entrepreneurs focusing in the cultural and creative industries; financial, business, digital and tech services; life sciences; low-carbon and environmental goods and services; and tourism. Specifically, £14 million is earmarked for companies promoting a circular economy.
The initiative will also be used to drive more capital to female and diverse founders.
Capital from the initiative has been split between equity investment firm MMC, which secured £45 million to seed its MMC Greater London Fund, and FSE Group, which will divvy the other £55 million between small loans of up to £500,000 and larger loans up to £1 million. MMC has already backed two companies through the new fund: media tech company Synthesia and life insurance startup YuLife.
In all, the capital is expected to leverage an additional £103 million in private investment and to support 170 London-based startups.
Most of the funding— £85 million—was provided by the European Union, in spite of current Brexit plan uncertainty.