The UK Cabinet Office has handed out two slices of its £10m Social Incubator fund to bankroll more macchiato-sipping big dreamers on East London's Silicon Roundabout.
Telefonica's venture capital outfit Wayra will get £1.2m of money from the public purse and, with the help of UnLtd, is expected to dish the cash out to startups deemed worthy of investment. Wayra and UnLtd didn't reveal exactly how the money will be spent, but promised to help fund 30 companies over the next two years as well as providing logistical support and any other help they can think of.
Meanwhile, Bethnal Green Ventures will get £900,00 from the government fund and split it into annual grants of up to £15,000 for 20 companies for the next four years. It'll also find them desk space in Google's Shoreditch Campus in the capital.
To get the handouts and a helping hand from the venture capitalists, hopeful startups will need to be "social". That's not "social" as in The Social Network but "social" in The Big Society sense: companies seeking to improve the lot of the general population.
One might argue that all business is "social" just as all music is "folk" - "I ain't never heard a horse sing a song" as Louis Armstrong so memorably put it - but these small companies will need to demonstrate they're solving a social or environmental problem before they get free London digs.
The money comes from the UK Cabinet Office's budget; the department announced the £10m fund last July as part of its Big Fund England to complement the Big Society Capital project that bankrolls established social efforts. The money is to be awarded in three rounds, this being the first of the three with more money to be given away later this year and early next.
The money for more Silicon Roundabout companies will please the
Silicon Roundabout Tech City crowd, which has enjoyed the government's largess for a while despite being one of the very few such development centres not based around a university (Boris' plan for a Technical and Creative Institute is just an accommodation block for more startup companies).
Universities tend to drive innovation, churning out graduates with a liking for the area and friends with similar ambitions, and centres of development cluster around Cambridge, Oxford and so forth.
Tech City has some university involvement, and London has some decent universities that have declared their support although that's not really the same thing (and we're always slightly bemused by the commitments from Loughborough University to the project). The idea behind Tech City seems to be that having Google, Amazon and their mates hanging around the Shoreditch area will create a vibrant startup scene that's not reliant on government handouts.
But not yet: for the moment taxpayers' hard-earned cash is needed to pay for seed funding, coaching, workshops and, most importantly, office space close enough to the Old Street roundabout to be cool. That space is critical, as the arrival of Google et al has driven up rent the area to the point where few startups without government money can afford to hang around. ®