The FSE Group has launched the Future London Growth Fund, a debt fund expected to deliver more than £70m of lending through loans of £1m to £3m to businesses across London’s 32 boroughs and the City of London. It aims to back 40 to 50 businesses, recycling capital as loans are repaid.
Tech Funding News, which first reported the launch, said the loans sit between conventional bank financing and larger venture debt. Kala Desai, head of the Future London Growth Fund at FSE, told Tech Funding News, "Our typical borrowers are innovative, high-growth businesses which have already demonstrated strong commercial performance, generally in the form of revenue, and are now looking for financing in order to reach the next phase of their growth."
The fund is aimed at revenue-generating businesses with a credible route to profitability, although borrowers need not yet be profitable. It will invest across sectors rather than focusing on one area of technology. FSE’s fund page lists potential uses of the debt including product development, hiring, new markets, premises, marketing and sales, and equipment.
Cornerstone commitments include £20m from the British Business Bank and backing from Funding London, the Mayor of London’s investment arm, through its investment entity GLIF Limited, as part of the London Growth Plan. Funding London’s amount was not disclosed in the launch coverage. A London Growth Plan one-year update in March described a proposed £20m commitment to the fund from the London Tech and Inclusive Growth Fund, to be matched by the British Business Bank under the Greater London Investment Fund structure.
Adam Kelly, managing director of debt and regional funds at the British Business Bank, said, "Smaller businesses operating in underserved communities, or those without established investor networks, can still struggle to secure the growth capital they need to scale. Our £20 million cornerstone commitment to the Future London Growth Fund will help address that gap, increasing the availability of finance for businesses with strong growth potential and supporting economic opportunity across London’s diverse communities."
Sadiq Khan, Mayor of London, said, "London is the best city in the world to start and grow a business, but too often many are overlooked by traditional finance providers. As a key commitment of my London Growth Plan, the Future London Growth Fund directly targets that funding gap and will provide a huge boost to businesses looking to scale up, helping them accelerate development and create new jobs."
Since 2019, FSE, whose chief executive is Julie Silvester, has managed the debt side of Funding London’s Greater London Investment Fund, an earlier £66m debt fund. FSE has invested in more than 100 London businesses, with past borrowers cited by Desai including Springpod, a London-based edtech company providing virtual work experience, and VivaCity, which uses artificial intelligence on city transport networks.