EU funds for 600 startups have been unfrozen after Brexit pause

Lynsey Barber
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Funding for startups from the EU has been unfrozen by the Treasury (Source: Getty)

Millions of pounds in funding for startups from the European Union that were put on hold after the vote to leave Europe have been unfrozen.

Cash from the EU Regional Development Fund was paused by the Treasury almost immediately following the vote for Brexit putting at risk a shot in the arm for the country's tech startups worth nearly £4m.

Read more: 600 startups on pause as EU funds frozen after Brexit vote

The funding, part of the £7.4m Capital Accelerate and Scale Tech Startup (CASTS) scheme administered by Capital Enterprise, will now go ahead and will launch in the next fortnight.

John Spindler, chief executive of Capital Enterprise, writing about the launch on LinkedIn, explained: "Well it got 'un-paused', contracts have been signed and on 6 October this project will kick off with a mission to provide advice and direct assistance to over 600 tech start-ups in London so they can achieve critical milestones, raise over £50m in additional investment and create over 400 jobs."

The EU Regional Development Fund provides billions of pounds worth of funding to the UK for various projects and chancellor Philip Hammond had promised to guarantee funding for some projects in the wake of concerns.

Read more: How Sadiq Khan can solve London’s startup funding crisis

However, the government has now signed off on the startup funding which those in the tech industry had warned if cancelled risked slowing down growth in the sector and damaging the tech ecosystem.

The funding will go towards creating four to five new tech accelerators, deploying corporate and investment experts across some of the top accelerators such as Startup Bootcamp, Seedcamp and Tech Stars to help startups become so-called scale-ups and creating an artificial intelligence lab with University College London (UCL) to offer world leading expertise.