Mercia Asset Management : £71m investment is ‘building new generation of tech businesses’

NPIF - Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF), has invested over £71m since its launch five years ago.

During that time the fund has supported 67 businesses - the majority in Yorkshire, Humber and Tees Valley - and created over 600 jobs in the region. According to Mercia, it has been instrumental in nurturing a new generation of home-grown technology businesses which are now starting to attract international attention.

Will Clark, Managing Director of Regional Venture Funds at Mercia, says: "NPIF - Mercia Equity Finance is helping to put the region on the map as a hub for new technology. Many of the businesses we have backed are pushing forward the boundaries and tackling key challenges such as climate change, developing healthcare innovations or other cutting-edge technologies in the field of AI and edge computing.

"By supporting them we are also building the industries of the future that will create new jobs and prosperity in the years to come. Five years after the launch of the fund, some of these businesses are now attracting attention from major overseas investors."

Success stories include Faradion, the Sheffield company that pioneered sodium-ion battery technology and was sold to the Indian company Reliance New Energy Solar recently for £100m. Reliance is now investing £25m into Yorkshire to support the next phase of Faradion's growth.

Others include Nova Pangaea of Tees Valley, which uses non-food biomass to create biofuels and is working on a project to develop 'green' aviation fuel; Sheffield-based Libertine, which develops smart engines for electric vehicles and which floated on AIM last year with a market capitalisation of £27.6m; and Leeds-based Assetcool, whose cable coatings reduce the temperature of overhead power lines to increase energy efficiency.

Healthcare companies it has backed include GI UK of Leeds, which distributes innovative endoscopy products and which was acquired by Dutch multinational Duomed Group last year; and Ilkley-basedEventum Orthopaedics, whose sensor technology could improve the success of knee replacements.

Other global pioneers include Slingshot Simulations of Leeds, a specialist in 'digital twin' technology; Brighouse-based Logically which uses AI to fight online misinformation; and Sheffield-based AMT, whose technology could make 3D printing viable for mass manufacturing, and which has so far raised £18m from NPIF and global investors.

Will Clark added: "Looking ahead, we expect the most promising businesses to attract even more international investment which in turn will help them scale and establish themselves as global players. Meanwhile the government's decision last year to extend the Northern Powerhouse Investment Fund means we can continue to make new investments throughout 2022 and 2023 and hopefully create even more new rising stars in the region."

Sean Hutchinson, at British Business Bank, said: "Mercia have been a key fund manager for the Northern Powerhouse Investment Fund since its launch in 2017, supporting many businesses in the North on their growth journeys. This vital investment has been utilised to create hundreds of new regional jobs, fuel growth plans and enable some of the North's most exciting businesses to fulfil their potential."

NPIF - Mercia Equity Finance provides funding from £100,000 to £2m for businesses in a variety of sectors, with a focus on Yorkshire, Humber and Tees Valley.

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.