Government Pumps 40M into Cloud Computing
A Government-backed fund to support UK cloud computing businesses has attracted £40 million of investment for British firms with high-growth potential.
Notion Capital Fund Two is the largest of 11 Enterprise Capital Funds (ECFs) set up by the Government to pump a mixture of public and private cash into UK business sectors where there is a lack of equity funding.
The Notion Capital Fund, which is also supported by the European Investment Fund, has a total value of more than £63 million, £40 million of which will be spent supporting emerging UK companies in the cloud computing and ‘software-as-a-service’ (SaaS) markets.
Announcing the size of the fund at the end of the first ECF funding round, business and enterprise minister Mark Prisk said:
“It’s absolutely vital that ambitious small firms can access the finance they need to expand and grow, and this new Enterprise Capital Fund will provide at least £40 million of funding to viable UK high-tech businesses. It will help a significant number of firms to grow and create jobs, boosting our economy.”
Notion Capital co-founder Jos White said that the fund would focus on investing in firms with recurring revenues of £1 million upwards that sell to other businesses rather than consumers. “Our background and expertise is in B2B and also we feel that B2B businesses tend to be built on financial performance as opposed to lead indicators such as users and they are therefore less hype-driven in some ways,” he said.
“Cloud computing is the next generational shift in the IT industry and is a true megatrend that will impact almost all aspects of the technology and communications industry,” added White. “To put this in numbers, Gartner predicts that the market will be worth $148 billion by 2014 and we believe will ultimately grow to being at least 50% of the entire IT industry.”
Businesses seeking investment could make an initial approach to the fund by “sending through a short 1-2 teaser” via the contacts on Notion Capital’s website, said White.
The Government has committed a total of £200 million to the Enterprise Capital Fund programme over four years until 2014/15, and further funds will be announced in future. In all of them, Government money is used alongside private sector cash to invest up to £2 million in individual small and medium-sized businesses.