UK Govt's £6.45bn Investment in Kraken Raises Eyebrows
The British Business Bank (BBB), the UK government's state-owned development agency, has made headlines for its recent £25m investment in software firm Kraken Technologies. While the BBB claims this move is aimed at supporting economic growth and making a financial return, critics argue that it does not align with the organization's stated objectives.
Kraken, valued at $8.65bn (£6.45bn), is hardly a small business. In fact, its valuation would place it in roughly 70th place on the FTSE 100 index if it were a UK-listed company already. Moreover, the majority of investors involved in Kraken's recent $1bn fundraising round were international, with DI Capital Partners leading the charge.
The question is: what exactly was the BBB hoping to achieve by investing £25m in Kraken? According to Peter Kyle, Business Secretary, this move will help keep the company in the UK. However, it's unlikely that such a small stake, equivalent to 0.35% of Kraken's valuation, would make all the difference.
Critics also point out that the BBB has quietly rewritten its investment mandate, allowing for larger direct investments. This raises questions about mission creep and whether the organization is expanding its scope beyond supporting small businesses. The £6.45bn permanent capital fund was topped up by £6.6bn in last year's Treasury spending review, which suggests a growing appetite for riskier investments.
In essence, the BBB's decision to invest in Kraken raises more questions than answers. Will this investment yield returns, or will it be a costly mistake? One thing is certain: if the new rules governing direct investments are not explicitly stated, this move may set a worrying precedent for future decisions.
The British Business Bank (BBB), the UK government's state-owned development agency, has made headlines for its recent £25m investment in software firm Kraken Technologies. While the BBB claims this move is aimed at supporting economic growth and making a financial return, critics argue that it does not align with the organization's stated objectives.
Kraken, valued at $8.65bn (£6.45bn), is hardly a small business. In fact, its valuation would place it in roughly 70th place on the FTSE 100 index if it were a UK-listed company already. Moreover, the majority of investors involved in Kraken's recent $1bn fundraising round were international, with DI Capital Partners leading the charge.
The question is: what exactly was the BBB hoping to achieve by investing £25m in Kraken? According to Peter Kyle, Business Secretary, this move will help keep the company in the UK. However, it's unlikely that such a small stake, equivalent to 0.35% of Kraken's valuation, would make all the difference.
Critics also point out that the BBB has quietly rewritten its investment mandate, allowing for larger direct investments. This raises questions about mission creep and whether the organization is expanding its scope beyond supporting small businesses. The £6.45bn permanent capital fund was topped up by £6.6bn in last year's Treasury spending review, which suggests a growing appetite for riskier investments.
In essence, the BBB's decision to invest in Kraken raises more questions than answers. Will this investment yield returns, or will it be a costly mistake? One thing is certain: if the new rules governing direct investments are not explicitly stated, this move may set a worrying precedent for future decisions.
. I mean, we can't just leave £6.45bn lying around without putting it to good use, right? Kraken's growth potential is huge and investing in them could bring in some serious economic benefits. Sure, the stake might seem small, but you never know what could happen. And let's be real, the BBC is just trying to future-proof itself against changing market trends 
. If we're being honest, £6.45bn is a lot of money and it's not like they're pouring all of it into one company. They've got plenty of other options too 
. What's not to love about some calculated risk-taking? 
! I get where they're coming from, wanting to keep it in the UK and all, but 0.35% stake? That doesn't seem like enough 
. Still, hey, maybe Kraken will surprise us and deliver big returns! That'd be awesome 
.
. I mean, who decides these things, anyway? The government? DI Capital Partners? Someone's gotta keep an eye on this stuff 
... Like, what's going on with our government's money? £6.45bn is a huge amount and I don't get why they're investing it in something like Kraken that's already super valued. It sounds like they're just trying to make some magic happen but without thinking through the consequences 
... What if this is a sign of things to come? 
i mean kraken's already got a ton of money, so it's def not like they need £25m from the BBB... maybe we should know more about what's goin on behind the scenes?