The area around east London dubbed "Tech City" by the government is to receive £1m investment from the Technology Strategy Board.
Companies in the Old Street and Shoreditch area can apply for £100,000 funding for their projects through a competition designed to support and extend the existing East London technology community. The Technology Strategy Board (TSB) will help them find the match funding they need to deliver their ideas.
Universities and Science Minister David Willetts said: "It is important that we nurture clusters such as the one that has grown up in this area. They are the crucibles where new industries are born, where communities support one another and where companies grow to become globally competitive."
Elizabeth Varley, CEO of TechHub, said: "This initiative is ideal for small and micro companies and start-ups in the Tech City cluster, which often struggle for capital or easy access to finance."
The Tech City Launchpad competition for funding opens on 6 May 2011.