HSBC to boost UK tech growth lending fund by £100m
HSBC will increase the size of its Growth Lending fund by £100m to £350m in 2024 as part of its ambition to boost funding for tech start-ups.
Launched 12 months ago, the fund provides finance access for high-growth UK tech businesses.
To access capital, the companies must be supported by a strong equity backing and a proven sales track record, plus a clear path to profitability, HSBC said.
“It’s clear these businesses require a bank that can grow and innovate with them, be personal enough to really understand them, and large enough to offer bespoke solutions for their very individual needs,” a spokesperson for HSBC said.
Earlier this year, a government study found that the UK tech sector is expanding over two and a half times faster than the rest of the UK’s economy.
The UK tech sector produced three unicorns this year, according to data from Pitchbook. The UK remains home to the most unicorns in Europe.
Tech Nation collectively valued UK tech firms at $1tn at the start of 2023. Artificial intelligence has been booming this year, but many tech start-ups have had a difficult 2023: “There’s been evidence of delayed buying cycles and headcount reductions, with a focus on resilience and recurring revenues,” HSBC said.
The tech sector is showing signs of increasing activity going into 2024.
HSBC added that it hopes to continue to expand the fund: “[The] dynamism we’ve seen among tech scale-ups in recent years is something we believe will continue develop in the coming years… this £100m increase demonstrate[s] HSBC’s ongoing commitment to the sector.”
Firms outside of London are getting a boost too: 50 per cent of deals with HSBC’s Growth Lending fund were made with firms in other areas of the UK.
“Ambitious digital technology businesses no longer feel it’s essential to be based in the capital and are able to tap into talent pools around the UK,” Roland Emmans, head of UK tech sector & growth lending at HSBC UK, said.
Bristol and Oxford were named as two of the top cities in Europe for tech investment last year, raising $300m in capital each in 2022, although London dwarfed other European cities with $11.3bn in investment.
“By supporting businesses around the country, HSBC UK is fostering the awareness that ideas and talent don’t necessarily need to be in the capital to succeed,” the spokesperson added.