A new investment platform has launched in an effort to create opportunities for Northern technology firms.
NorthInvest, a not-for-profit mutual founded by digital entrepreneur Dr Adam Beaumont, aims to make it easier for the region’s start-ups to access crucial early funding and free business advice and support.
The platform connects angel investors with ventures in the North, some of which have historically struggled to compete for cash against the more prominent digital community in London.
It has already gained the backing of Leeds City Council, Leeds City Region Enterprise Partnership, KPMG and the UK Business Angels Association.
Dr Beaumont, chief executive at aql, told The Yorkshire Post there has been a lack of visibility for the angel investment community in the North.
In order to grow the tech community in the region, companies must know where they can find early-stage investment, mentoring services and “good sound business advice”, he said.
The platform is the “missing link” in the growth of the digital economy in the North, he added.
“While we may have tech incubators providing space to look after businesses, we need to make sure as we grow skills in the region, they’ve got a reason to stay in the region,” Dr Beaumont said.
“We need to make sure that there’s companies that can support them and employ them and they can get the investment that they need.”
As well as connecting businesses with angel investors, NorthInvest includes a regulated investment platform that provides access to money from institutionally-backed funds - such as pension funds - which can be secured through debt or equity lending.
In future, it also hopes to pair up private investment with public grants, Dr Beaumont said.
This would see private angel investment topped up through matched or ratio funding with public funding schemes, such as those available through the LEP.
“It makes angels’ money go further and it reduces the equity dilution in start-up businesses because they’re getting some public funding,” Dr Beaumont said.
“If we do this right, we can create an agile way for start-up businesses to gain some help from public funds. There’s certainly a lot of appetite to create funds of this type,” he added.
The platform has signed up 12 angels to date, including big names from the angel sector. “We’re being a little bit picky,” Dr Beaumont said. “We’re looking for angels that are the right fit - angels who don’t just want to invest in companies, but also want to mentor them.
“People will see there’s some quite exciting names.”
There are also several private sector companies who are also keen to sign-up, he added.
KPMG director Graham Pearce said there will be wider social benefits from growing the digital sector “eco-system” in the North.
He said: “We want to mobilise our own networks and what we can offer for the benefit for the Northern tech community.
“Whether that’s putting people into contact with people we know, or offering some pro-bono help around structuring plans or approaching the market, we want to help the eco-system to thrive because it’s better for everybody.”
The platform has been called NorthInvest to highlight the importance of boosting the digital economy throughout the North, Dr Beaumont said.
“I don’t believe in city boundaries,” he said. “We’re trying to open up investment opportunities in the whole North of England. That aligns with the Government aspirations for the growth of the Northern Powerhouse.”
He added: “As long as it fosters investments in a fair manner in the North, that’s exciting for us.”
NorthInvest has been founded as a not-for-profit mutual, following the success of a previous aql-backed initiative, IXLeeds.
IXLeeds is one of three internet exchange operators in the UK and the only operator based outside of London.
It promotes regional cooperation between operators to improve digital infrastructure and support solid internet exchange fabric.