U.K. Chancellor of the Exchequer Rishi Sunak is planning a summit for entrepreneurs in the technology sector next week and will introduce a 375 million pound fund for startups that are focused on research and development (R&D), the Financial Times reported on Friday (July 16).
The Future Fund Breakthrough is part of a wider initiative to support companies in the tech space and includes revamping competition laws and extending new tech visas in an effort to attract talent.
Funds will be awarded to British technology firms needing money to step up the development and release of advanced technologies, per the report. An earlier version of the fund introduced last April targeted firms struggling due to the COVID-19 pandemic.
The U.K. is looking to support promising British tech leaders and innovators in order to better compete with the U.S. and China. The monies will be exchanged for government stakes in the companies. To qualify, firms have to have plans in place to raise a minimum of 20 million pounds from private backers, the news outlet reported.
The British government is also planning a digital markets unit that will serve as a new competition watchdog and will work to reel in the power of U.S. Big Tech firms like Google and Apple, sources told FT.
The new watchdog will aim to help smaller British startups by ascertaining they have equal access to app stores. The division also will contest software bundles and licensing deals that appear to be unscrupulous, according to the article. Firms violating the code of conduct could face fines of up to 10 percent of revenues.
The FinTech space in London has been backed by $5.3 billion in the first six months of this year and got more funding than any other city in Europe, and was just behind San Francisco but ahead of New York.
Kaushalya Somasundaram, head of payments partnerships and industry relations at Square, told PYMNTS CEO Karen Webster and Innovate Finance CEO Janine Hirt that approximately 38 percent of deals that closed in the first six months of 2021 involved at least one U.S. backer.
The U.K. Financial Conduct Authority (FCA) has plans to invest 120 million pounds ($166 million) in data and tech capabilities through 2024.