Mobile-first companies looking for early stage investment could see a big boost from the Mayor of Londons new fund, set up to give the capitals SMEs access to crucial growth funding.

MMC Ventures won the competitive tender to deliver the £11m MMC London Fund, which is partly financed by a European Regional Development grant and is being matched by further investors and business angels to bring the total up for grabs to £22m. Its managing partner, Bruce Macfarlane, said he expects “most businesses to have a mobile capability and a high percentage to be mobile-specific. Were looking to back entrepreneurs who will be leaders in their industries and London is brimming with talent.”

Masabi was among the first companies to benefit from investment last month. The mobile ticketing business received $2.8m to grow its team in London and accelerate the roll-out of its ticketing solutions across global transport systems. “Mobile-first enables daily utilities to be provided at a fraction of their traditional cost, with more convenience and less waiting in line,” said Ben Whitaker, CEO of Masabi. “However, mobile-first companies like Masabi are not mobile-only, as we also extend services to the unbanked and those without mobile to provide a complete service.”

Finance, education and health focus

MMC typically invests between £500,000 and £2m. The fund will focus on companies and sectors that it believes will provide economic growth and create jobs, including financial services, creative industries, the digital economy, leisure, education and healthcare.

Along with Masabi, the fund has already invested in four other businesses, including home swapping site LoveHomeSwap, which may invest in a mobile site or apps, and MBA & Company, an MBA consultancy service. The remaining two are yet to be confirmed. The funders have been given equality and sustainability objectives and a portion of the fund is being allocated to more deprived boroughs including Hackney, where TechCity is based, and Tower Hamlets. 

The fund will be administered by SME Wholesale Finance, which was established to support the Mayor of Londons Economic Development Strategy. Maggie Rodriguez-Piza, chief executive of SME Wholesale Finance, said: “Up to now, SME Wholesale Finance has not backed investments in mobile businesses. This is not intentional, but rather a function of our previous funds being fully invested by 2010. Mobile is a key consideration for us as investors, as it is a sector of strategic importance to the London economy, alongside the other sectors that the fund will focus on.”

The fund will be launched by the Deputy Mayor for Business and Enterprise, Kit Malthouse, at a City Hall event later today.

Update:

Somo has been confirmed as one of the five initial receivers on investment. See the story here. Ben Wosskow, chief marketing officer at LoveHomeSwap, also came back to us and said: “Around 30 per cent of our traffic comes from mobile devices – this is up 50 per cent year on year – so mobile is definitely a key priority for us and part of how were going to invest the funds from MMC. Were planning to launch a mobile website and iOS app shortly as part of our plans to capitalise on demand for this from our members as theyre arranging their travel plans for the year ahead.”

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