London launches £70M debt fund for scaleups banks won't touch
What's the deal? The Future London Growth Fund has launched with £70 million to provide debt capital to high-growth London businesses considered too risky for traditional lenders. It offers loans of £1 million to £3 million, aiming to back 40 to 50 companies and recycle repayments into new deals.
Who's behind it? The British Business Bank is committing £20 million alongside Funding LondonDealroom has a profile for this one. Try Dealroom →, the Mayor's investment arm. The fund is managed by The FSE Group.
Why now? The fund targets a financing gap — loans that sit between bank lending and larger venture-debt deals, aimed at scaleups with commercial traction that may not yet be profitable.
What's the endgame? Kala Desai, head of the fund, said its debt financing will work "alongside venture capital rounds" and serve as an "interim step to the next round."
What could go wrong? British Business Bank research cited in coverage found 71% of London business owners reported making a profit, versus 84% nationally. But the launch is not evidence the gap has closed; deployment and who qualifies will be the real tests.
The signal: The fund fits a broader push to mobilise UK growth capital, including pension providers' exploration of a £1 billion-plus UK Scale-Up Fund. Whether such interventions reach overlooked founders will depend on how the money is spent.
Read more: impactloop.com
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