£1bn cash for UK's tech start-ups

The government has announced a venture capital fund for tech start-ups that it hopes one day will top £1bn.

The UK Innovation Investment Fund will gain funding from the Department of Energy and Climate Change and the Department of Health who will each match private sector contributions of up to £150m.

The government hopes the fund's cash will eventually reach £1bn within the next 10 years.

The fund will be investing the cash in "technology-based businesses with high growth potential", particularly small businesses and spin-offs in the field of digital and life sciences, clean technology and advanced manufacturing.

Rather than invest directly in the companies themselves, however, the fund will be investing in other specialist tech funds who will distribute financial support to the businesses.

Science and Innovation Minister, Lord Drayson, said in a statement: "We must safeguard the government's record investment in the science and research base over the past decade. We cannot afford to lose out on the wealth this investment can yield and we will need this wealth to continue our sustained investment in research."