Autumn Statement 2016: £400m for British Business Bank a ‘nice gesture’ but a drop in the ocean for UK tech start-ups

£400m a drop in the ocean for UK tech start-ups

As announced in the Autumn Statement, the Government will put £400 million into stimulating UK tech growth.

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Commenting on the announcement in the Autumn Statement that the Government will encourage private investment with £400 million from the British Business Bank to unlock £1 billion of new investment in innovative firms planning to scale up, Patrick Imbach, co-head of KPMG’s Tech Growth practice, said:

“This announcement was a timely acknowledgment that our long-term investment culture in the UK, as far as tech start-ups are concerned at least, is lagging behind the likes of the US and China.

“Do we think it’s a game-changer? No, we don’t. The reality is £400m is a drop in the ocean when you look at historic levels of investment into the UK start-up community. Indeed, our own recent Venture Capital Insights survey highlighted a total of $4,336 million of investment by VCs in UK businesses over the last four quarters.

“Will it make UK entrepreneurs sell-out later? Again, I’m afraid the answer is no. £400 million on its own will not be sufficient to bridge any later-stage funding gap and does not address other reasons for companies not going all the way in the UK, such as the lack of experienced entrepreneurs with a proven track record of scaling businesses beyond the early growth stages.

“That said, it was a nice gesture in uncertain times, and does have the potential to unlock further private investment needed to grow the next generation of world-class technology firms in the UK. Additionally, it could go some way to plugging the potential gap that is created by the question mark hanging over UK firms’ access to the European Investment Fund.”
 

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For further information please contact:

Katy Broomhead, KPMG Corporate Communications

T: +44 (0)16 1246 4623

M: 07824 537963

E: katy.broomhead@kpmg.co.uk

KPMG Press office

T: +44 (0) 207 694 8773


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

 

Autumn Statement 2016

Autumn Statement 2016

The Autumn Statement took place on 23 November. KPMG's coverage is available from this hub.

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