U.K. Tech Firms Can’t Access Virus Relief, Chancellor Told

(Bloomberg) -- Chief executive officers and founders from a dozen of some of the U.K.’s largest tech startups have warned their sector is at risk unless the government urgently changes its coronavirus stimulus package.

In a letter sent to U.K. Chancellor Rishi Sunak on Wednesday, startups including Deliveroo and Citymapper said they fall through the cracks of the more-than 330 billion-pound ($409 billion) Covid-19 rescue package pledged by the government last month.

The young, and in many cases loss-making companies say they can’t qualify for corporate finance loans, which require mature credit ratings and high profits, but that they’re also too big for small business relief.

“Our sector will be crucial to helping the U.K. economy bounce back quickly after the pandemic,” the executives jointly wrote in the letter. “However, it has not yet received government support, unlike our competitors in France and Germany.”

The letter is signed by the bosses of Babylon Healthcare Services Ltd., BenevolentAI Ltd., Blockchain Access U.K. Ltd., Bulb Energy Ltd., Citymapper, Darktrace Ltd., Deliveroo, Faculty Science Ltd., Five AI Ltd., GoCardless Ltd., Graphcore Ltd. and Improbable Worlds Ltd.

They say the government’s Covid Corporate Financing Facility, Coronavirus Large Business Interruption Loan Scheme and Coronavirus Business Interruption Loan Scheme are inaccessible.

Finance minister Sunak should “urgently set up a taskforce meeting” of companies and Treasury officials to work out how they and similar ventures can access government relief, they added.

Representatives for the Treasury didn’t immediately respond to a request for comment.

Critical Workers

Deliveroo is in a particularly complex position. Britain’s tough-talking merger watchdog, the Competition and Markets Authority, has previously thrown up potential obstacles to a proposed $575 million minority investment from Amazon.com Inc. The funding would give the meal-delivery company a much-needed lifeline.

But Deliveroo’s employees have also been designated as critical workers by the government and act as an entirely different kind of lifeline to vulnerable people.

Citymapper, an app that helps people navigate public transport networks around the world, was reported by Sky News in January to be exploring a potential sale. Its business is built around selling travel passes to make regular journeys cheaper, but cities coming to a standstill this year will have made this model even more challenging.

(Updates with context in final three paragraphs)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.