Rishi Sunak’s Covid start-up fund, the Future Fund, has moved to liquidate dozens of companies in a bid to recover taxpayer loans.
According to court records, the fund has issued winding-up petitions to 32 businesses it supported during the pandemic, resulting in many being ordered to cease trading without recouping the investments.
The Future Fund, launched by Sunak in 2020 while he was Chancellor, aimed to bolster loss-making start-ups during the pandemic. It provided £1.1 billion in loans to 1,191 companies on three-year terms, converting the loans into shares upon follow-on investments. Companies that failed to secure additional funding were required to repay the loans at double the amount plus interest.
With the loans now reaching maturity, the fund has taken legal action to recover investments of up to £5 million by pushing companies into compulsory liquidation. Since the end of 2022, 23 out of 32 taxpayer-backed companies have been placed into administration or liquidation.
Notable casualties include AiSolve, a virtual reality firm with £11.4 million in debt, the investment app Dabbl, and companies supported by Nova Group, an investment business backed by former Tesco CEO Sir Terry Leahy.
A spokesman for the British Business Bank, which operates the Future Fund, stated, “We have a duty to protect the interests of taxpayers. When companies reach the maturity date and their loans remain outstanding, we will take steps to recover funds, which may include seeking to wind up companies. We will work with liquidators to assist their investigations and their efforts to recover assets for creditors.” The bank also mentioned that extensions had been granted to the majority of companies requesting them rather than demanding immediate repayment.
As of the end of March, the Future Fund had converted 712 loans into equity stakes in companies, with 211 loans still outstanding. A total of 202 companies have become insolvent, while 66 have resulted in cash returns for the fund. Last year, the British Business Bank reported a loss of £289 million on a fair value basis for the fund.
