A new £11 million London-focused fund will be investing alongside other venture capital firms and business angels to back enterprising businesses in the capital.
The pot, which is managed by MMC Ventures, is set up as a matching fund, with further capital from the European Regional Development Fund meaning that £22 million will be leveraged.
The MMC London Fund will seek to provide funding for early-stage businesses which can, the firm says, generate ‘significant’ levels of economic growth and create jobs.
It has already backed three businesses through the fund, including mobile firm Masabi, holiday home business LoveHomeSwap and digital talent marketplace MBA & Company, and will announce a further two in the not too distant future.
London mayor Boris Johnson says, ‘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 fund is set to be officially launched at City Hall in London, where deputy mayor for business and enterprise Kit Malthouse will lead proceedings.
Malthouse adds, ‘We’ve listened to London’s small business owners and know that getting access to finance can be challenging.
‘The MMC London 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.’
Fund manager MMC Ventures has closed five deals in 2013, to go with the six it competed in 2012. Alongside the MMC London Fund early investments, namely Masabi, LoveHomeSwap and MBA & Company, the firm has also backed Tyres on the Drive and NewVoiceMedia.
Bruce Macfarlane, managing partner at MMC Ventures, comments, ‘Last year was our busiest ever the 2013 looks set to continue that active investment rate; we have already invested the new London Fund in five 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.’
MMC London Fund has been set up to invest in London’s ‘most important strategic business sectors’, as defined by the Mayor’s Economic Development Strategy. Those included are: financial services; creative industries; the ‘digital economy’; leisure; education; and healthcare.
Furthermore, under the terms of the fund, the portfolio must meet certain equality and sustainability objectives, and be sought from across a broad cross-section of SMEs throughout London’s 33 boroughs, with a portion of the fund focused on more deprived boroughs including Hackney and Tower Hamlets.
