The funding comes from the Engineering and Physical Sciences Research Council (EPSRC), the UK's main funding agency for scientific research.
They will award Impact Acceleration Accounts ranging from £600,000 to £6m to 31 universities across the UK.
Some of London's universities will benefit from a share of 60 million pounds in investment from the government. UCL and Imperial College London are two of those see the cash. The money will help science and engineering students set up new businesses.
Business Secretary Vince Cable announces a £60million investment into over 30 universities across the UK to help create successful businesses and increase entrepreneurship in universities.
UCL, Queen Mary, Imperial College London, and Brunel are receiving almost £12 million altogether.
Mr Cable today announced the investment to help our most pioneering scientists and engineers create successful businesses from their research, improve industrial collaboration, and foster greater entrepreneurship.
The announcement was made during Global Entrepreneurship Week at a visit to the London studios of university spin-out company Space Syntax, an SME which uses urban modelling techniques to design better cities and public spaces such as the redevelopment of Trafalgar Square.