The government made a $6.4 million loan to XMOS earlier this year, reports the Telegraph.

The loan converts into equity if XMOS attracts new equity funding.

The loan comes from the government’s Future Fund – set up with £250 million from the government and £250 million from private investors.

The Future Fund has already invested £588 million in startups, overstepping its original funding.

The Future Fund operates by making convertible loans to startups of up to £5m, matched by a private investor.

The loan converts to equity when the company next raises funding, so the government could end up with stakes in hundreds of early-stage companies.

As well as tech companies the Future Fund has also invested in restaurants and a company which organises posh sex parties.