British start-up technology companies are being denied access to their single largest source of investment funding as European institutions begin to cut the UK out of future projects.

Venture capital funds say they have been told that the European Investment Fund (EIF) has now effectively turned off the tap to new British commitments.

Before the vote to leave the EU last year the fund indirectly invested more than half a billion pounds a year in Britain’s technology sector, its largest single source of money. The EIF channels money into venture capital companies that combine it with private sources of funding to invest in the fast-growing but risky tech sector.

Companies are now warning the government that unless it steps in to make up the shortfall, they will move elsewhere in Europe and take jobs with them.

Since March a string of venture capital funds have been rebuffed by the EIF despite being in advanced funding talks. These include Seedcamp and Episode1 Ventures, which were early investors in some of the country’s best-known start-ups.


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Source: The Times



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