Midland technology firm KeTech and Glasgow-based Vamosa are the first to benefit from a Government-backed fund providing vital investment to innovative small businesses.
In Nottingham last week, Business Secretary Lord Mandelson announced an investment of £2 million from the Capital for Enterprise Fund to local firm KeTech.
A further £1 million investment is being made in Vamosa, which provides IT systems to businesses and the public sector.
Lord Mandelson said: “Ambitious and innovative businesses like these are the lifeblood of the economy but tough credit conditions can make it difficult for them to invest in their future.
“The Government is committed to ensuring that viable companies have the finance they need to grow.”
Ensuring innovative British businesses can access this sort of risk capital is one of the key commitments from the Government’s industrial strategy, New Industry New Jobs.
The £75 million Capital for Enterprise Fund was created to help viable small and medium-sized businesses with genuine growth potential that would otherwise be unable to secure investment.
KeTech will receive £2 million of equity funding from Octopus Investments, which manages £30 million of the £75 million total.
KeTech Group Chief Executive John Kearney said: “Since the current economic crisis began, the lack of available credit, even to viable businesses such as KeTech, has significantly impaired our ability to keep growing. As a result, we turned to the Government for help.
“I am therefore delighted that the Octopus Capital for Enterprise Fund is injecting much-needed capital into KeTech.
“This will play a critical role in enabling us to secure profitable new contracts which regrettably, until now, we have been forced to turn away.”
Maven Capital Partners, which also manages £30 million of the £75 million fund, is investing £1 million of equity funding in Vamosa.
Founded in 1998, KeTech provides communication software and services to the rail industry.