By Aisling Finn on Wednesday 19 August 2020
Nearly two thirds (64 per cent) of funding went to companies with all BAME or mixed ethnicity management teams and 82 per cent went to firms with mixed-gender management teams.
Firms with Black, Asian and minority ethnic (BAME) and mixed ethnicity management teams account for well over half (64 per cent) of companies that accessed Future Fund finance, according to data released by the British Business Bank.
The vast majority (82 per cent) of companies that have accessed finance through the Future Fund scheme have mixed-gender senior management.
Women and ethnic minorities have often been seen to be underrepresented in terms of accessing venture capital, but this new showing the level of diversity of companies receiving convertible loan agreements under the government-backed Future Fund scheme demonstrates an improving trend in the UK.
Data from the European Investment Bank shows that the percentage of female-led involvement in venture capital in the EU has remained at a fairly stable, but low, level since 2008, rising from roughly 5 per cent to just under 10 per cent in 2017.
To date, 590 companies have been approved for a convertible loan under the Future Fund scheme, totalling over £588m.
Companies with purely BAME management reams received 28 convertible loans to the tune of £21.8m, while mixed ethnicity-led companies received 287 loans totalling £322.4m.
Despite a clear positive trend towards better diversity in management teams, all-white led companies still accounted for 224 loans, which came to just under £193m.
Companies with all-female management teams received 8 convertible loans equalling £7.2m and all-male teams accounted for 147 loans, to a total of £94.1m.
Unsurprisingly, when looking at regional distribution, London came out on top.
Companies in London received 59 per cent of the convertible loans totalling over £346m, despite the city only being home to 19 per cent of the UK’s businesses.
The South East trailed behind the capital, receiving 17 per cent of loans to the tune of £89.5m.
The region that had the smallest amount of accepted applications to the Future Fund was the East Midlands where only four companies were approved for a convertible loan.
Not too far ahead of the East Midlands, Northern Ireland was the penultimate region on the list, with only five Northern Irish firms receiving Future Fund cash.
Companies in the East Midlands received £2.1m in convertible loans, while firms from Northern Ireland received £5m worth of Future Fund loans.