(Graphcore partnered with Microsoft, should be well-funded. They’re competing with Nvidia on the deep learning hardware side.)
An open letter to the Chancellor published today and signed by the U.K.’s biggest “scale-ups” — later-stage, highly valued, but still venture-backed (and often loss-making) startups such as Deliveroo, Benevolent AI, Citymapper, Graphcore and Bulb — urged the U.K. government to make room to provide lending options to companies like theirs and other startups.
They are specifically calling for a special task force to be created to consider how to build lending schemes for companies like theirs, as well as to alter the rules on the three big schemes that have already been announced to accommodate them, and give them the same access as other businesses.
Countries like France and Germany have accounted for this business disparity. They have created special provisions for lending to startups in response to the COVID-19 economic and social upheaval, and respectively there have been programs backed with $4.3 billion and $2.2 billion in government money put into place.
But the three main U.K. initiatives that have been announced — Coronavirus Large Business Interruption Loan Scheme, the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme — have basic requirements that effectively rule out scaled-up and smaller startups from applying.
These include provisions around having established credit ratings for public companies (as in the case of the bigger loan schemes), or financing that is too small (as in the case of the smaller loan schemes), or the scaled-up companies have annual revenues that are too high (both the CBILS and CLBILS schemes have respective turnover thresholds of £45 million and £500 million).
In the meantime, the U.K. government has made small moves to encourage startups to continue building in a more focused way — for example, last week it announced £20 million in grants to businesses that are building better “resiliency” products to help companies better weather crises like this in the future. But for companies that regularly see revenues (and corresponding expenses and losses) in the tens and hundreds of millions, grants in the tens of thousands of dollars are like putting drops of water into the ocean.
But with startups accounting for some 30,000 businesses and some 300,000 workers in the U.K., and significant sums toward the country’s GDP and operations, it seems like a big problem to ignore for too long.
