Mayor launches £22m fund to help city's small and medium enterprises
The Mayor, Boris Johnson, has announced a £22m 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.
The Mayor of London, Boris Johnson, said: “London's small to medium companies are a vital component of this city's economy, supporting significant numbers of jobs. 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. He said: “We've listened to London's small business owners and know that getting access to finance can be challenging. 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.
Bruce Macfarlane, Managing Partner at MMC Ventures, said: ‘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. 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.’
Companies interested in accessing funds should contact MMC Ventures online at: www.mmcventures.com/entrepreneurs.aspx
Notes to editors
• The MMC London Fund is part financed by the London European Regional Development Fund. The Greater London Authority is the managing agent for the European Regional Development Fund Programme, which is one of the funds established by the European Union to help local areas stimulate their economic development by investing in projects which will support local businesses and create jobs. MMC Ventures won a competitive tender to launch the MMC London Fund. The new £11m fund is specifically focused on investment in London businesses – and as it is a matching fund, at least £22m will be invested in the capital as a result. The new London Fund will co-invest alongside other venture capital firms, business angels and other MMC funds.
• The fund will be administered by SME Wholesale Finance Limited (SMEWFL) and delivered by MMC Ventures. SMEWFL was established by the London Development Agency using public money to address the market gap where viable SMEs are unsuccessful in accessing finance. Typically, accessing equity finance up to £2-5m can prove hard for SMEs. The fund consists of £6m from the European Regional Development Fund (allocated to City Hall for distribution) and £4m of returns from the SMEWFL.
• Founded in 2000, MMC Ventures is an active investor and award-winning venture fund manager, focused on technology-enabled sectors where the UK is a world leader -particularly financial and business services, business software, digital media and e-commerce. With circa £100 million under management, MMC invests £10–15 million per annum in a combination of new investments and add-on capital for existing portfolio companies. MMC specialises in fast-growth early-stage businesses, partnering with entrepreneurs and impressive management teams to achieve substantial scale and profitability.
• More information about MMC Ventures is available at www.mmcventures.com