Alcoholic tea maker and vegan energy bars among failures in Sunak Covid start-up fund

As Chancellor, Rishi Sunak has championed the Future Fund as a way to keep UK startups afloat during the pandemic. Credit: Daniel LIAL/POOL/AFP

A vegan energy bar company, a cryptocurrency data firm, and an alcoholic tea maker are among the Rishi Sunak Future Fund-supported businesses that went bankrupt.

Every tenth company supported by the Future Fund has gone bankrupt. According to official figures, the taxpayer fund has collapsed.

Quarterly data released by the British Business Bank (BBB) ​​show that 111 out of 1,190 companies that borrowed £1.1bn from the fund have failed.

Business names are being released for the first time.

They show the fund has lost all of its money on investments including: Human Food, a vegan energy bar company that borrowed £261,288; Crowdsense, which aimed to scan social media to give cryptocurrency traders an edge; and Noveltea, which sold teas laced with gin, whiskey and rum.

The taxpayer-owned BBB, which manages the fund, said the increase in administrations was «partly due to the weakness of the UK market as a whole and the banking crisis.»

p>

The Fund said insolvency rates have risen this year amid worsening economic conditions. The collapse is likely to accelerate dramatically in the coming months as the fund seeks hundreds of loans.

As Chancellor, Mr Sunak championed the Future Fund in the early days of lockdown as a way to keep Britain's most innovative start. afloat.

The Fund has lent up to £5 million to unprofitable companies, provided they also receive funding from private investors. The loans were intended to be converted into shares when the company raised the next round of funding.

The taxpayer was left with an eclectic mix of investments in companies ranging from sex party organizer to toilet seat maker. and Bolton Wanderers Football Club.

Latest figures show that 28 more Future Fund-backed companies went into administration in the first quarter of the year, bringing the total to 111 companies.

This means an acceleration compared to the previous quarter, when 16 enterprises took over.

By comparison, only six companies returned funds to the fund after selling in the quarter, bringing the total to 49 to date. were converted into shareholdings. The taxpayer now owns stakes in 529 companies through the fund.

However, 502 companies still owe money as they have failed to raise funds since the first loans were made almost three years ago.

These businesses are now facing looming debt maturities that they fear could leave hundreds more companies insolvent.

Last month, The Telegraph reported that the Future Foundation wrote a warning letter to startups that within a few months he will require loans.

Loans are repayable after three years and companies are required to pay back double the amount with interest if they fail to raise new funds that are converted into equity.

Ken Cooper, Managing Director director of venture solutions bank, said: “Future Fund is currently entering a phase of maturity that marks three years since the first loans were issued. This is likely to boost the level of transaction activity rapidly in the coming months.”

Mr Cooper said the fund was designed to provide “long-term value to UK taxpayers”. Officials are confident that the fund will bring profit to the taxpayer, despite the increase in the number of administrations.