The new £11m MMC London Fund will invest in fast-growing London businesses
MMC Ventures won a competitive tender to run the London Fund, which will co-invest in fast-growing London firms alongside other VC firms and business angels.
The £11m fund is partly financed from the European Regional Development Fund, although at least £22m in total will actually be invested in London firms, as it is a matching fund.
Five London SMEs have already taken investment from the fund, including Masabi, LoveHomeSwap, Somo and MBA & Company – the remaining company is still unannounced.
Speaking at the launch of the fund at City Hall yesterday, Kit Malthouse, the Deputy Mayor for Business and Enterprise, said: “We’ve listened to London’s small business owners and know that getting access to finance can be challenging. The MMC London Fund will invest money to support fast-growing businesses today, using returns from the investments to support even more companies in the future. This is a win-win for all involved.”
Nick Hynes, co-founder and CEO of mobile marketing firm Somo, says he “couldn’t be more proud” to be one of the first companies that the fund is investing in: “Mobile continues to change the world we live in, every day, and we love playing a part in it. Our new tech and engineering hub is a demonstration of how we are building a centre of mobile expertise and experience that leads the world. This investment will allow us to grow even faster.”
Core business sectors
The MMC London Fund’s aim is to provide funding for early-stage businesses that can generate significant levels of economic growth and create jobs.
It has been set up to invest in London’s most important strategic business sectors, as defined by the Mayor’s Economic Development Strategy: financial services; creative industries; the “digital economy”; leisure; education; and healthcare.
In addition, the portfolio must meet certain equality and sustainability objectives, and be sought from across a broad cross-section of SMEs throughout London’s 33 boroughs, with a portion of the fund focused on more deprived boroughs including Hackney and Tower Hamlets.
“London’s small to medium companies are a vital component of this city’s economy, supporting significant numbers of jobs. It is a top priority for me that these entrepreneurial enterprises receive practical support to thrive and grow, not least as many have the potential to become major employers in the future,” added Mayor of London Boris Johnson. “This innovative equity fund is using public and private money in order to offer much needed financing when more traditional routes are not available.”
MMC Ventures, who is managing the MMC London Fund, traditionally invests in the £0.5m-£2m equity gap market, and manages several funds including an open EIS fund. It has around £100m under management. Last year, MMC invested in six new companies and provided add-on capital to a further seven portfolio companies.
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