(Bloomberg) — The U.K. has taken stakes in more than 150 high-growth companies, Chancellor of the Exchequer Rishi Sunak said Tuesday, as he hosted a meeting of investors and tech companies in order to spur the sector onward.
The stakes are a result of the government investing more than 1 billion pounds ($1.4 billion) in nearly 1,200 companies via its Future Fund, according to the the Treasury. The program, launched in May 2020, uses convertible state loans to attract private investment and help tech companies grow. Some of those loans have now been converted into stakes, it said.
“Investing in these companies has the potential to accelerate innovations that will transform U.K. industry, develop new medicines and strengthen our position as a science superpower,” Sunak said in the Treasury statement ahead of the half-day conference bringing together investors and tech companies.
The disclosure illustrates a change in tack by the ruling Conservative Party, which is traditionally averse to state intervention in private companies. The taxpayer now holds stakes in companies including Vaccitech Plc, which co-invented the Covid-19 vaccine with Oxford University that’s now being supplied by AstraZeneca Plc to 170 countries, and in Century Tech, which uses artificial intelligence to tailor learning for children, the Treasury said.
Sunak told the Treasury Connect conference that his approach has been guided by “lasting impression” left on him by time spent in California during his studies.
“It left me with the conclusion a small number of very innovative high quality firms are critical for our future success because they disproportionately create economic growth, they create jobs and they have the potential to transform the way we live our live,” he said.
The chancellor also said he’s trying to embed in the Treasury the “crisis” mindset that prevailed when the pandemic hit last year as ministers had to roll out programs to support workers and businesses at pace. “What we’re trying to do is think more creatively innovatively about policy making,” he said.
Under the Future Fund program, loans ranging from 125,000 pounds to 5 million pounds were made to U.K.-based startups, subject to them securing at least an equal amount of funding from private investors.
Other companies in which the government now holds stakes include Cipher Surgical Ltd, which makes products that assist in keyhole surgery, and Ripple Energy, which allows customers to own shares in a wind farm.
Investment in U.K. tech companies totaled 11.2 billion pounds last year, a record that came in spite of the pandemic, according to the Treasury. Tuesday’s meeting will include chief executive officers of investors and tech firms including Funding Circle and Monzo, with Sunak leading four sessions on access to finance, fintech, talent and life sciences, the Treasury said.
(Updates with Sunak comments starting from fifth paragraph)
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