The funding will enable Ripon-based Digital Converters to continue its rapid growth and launch a new cloud-based platform where families can store their memories securely.
The company serves customers throughout the UK and has also transferred films for businesses, including fashion designer Stella McCartney.
Digital Converters can convert almost all types of outdated media including videotapes, photos and cine film to digital formats such as memory sticks, DVD and cloud.
So far this year, it has migrated over 100,000 video tapes along with over 500,000 photos.
Founded in 2016 by friends James Palliser and Sean Parle from a bedroom, it now employs a team of 25 and aims to double in size each year for the next five years.
The new online platform will be a dedicated service for safe storage of family archives, accessible via web browsers or Apple, Android and TV apps, offering a number of features currently not available through some of the big hosting platforms.
Mr Parle, director at Digital Converters, said: “For decades, memories were captured on formats which are now inaccessible and deteriorating.
"Our existing service helps people reconnect with their memories by converting them to digital. The new platform is a natural extension of this, enabling customers to store their memories online and build an archive that can be easily viewed and shared with other family members.
“This round of funding will allow us to launch the platform and step up our marketing to target new regions such as Europe, with the ultimate aim of rolling it out worldwide.”
NPIF – Mercia Debt Finance is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF).
Jonathan Craig, senior investment manager at Mercia, said: “Sean and the team are driven young entrepreneurs who have grown the business rapidly over the past five years.
"With the pandemic having accelerated the demand for digital services, they have now spotted a gap in the market for a dedicated hosting service. The funding will enable them to pursue this opportunity.”
Melanie Ellyard at British Business Bank said: “Digital Converters is an exciting young business that saw huge growth over lockdown, utilizing the technology of today to safeguard important family memories for the future.
"The company is looking to grow its foothold not only beyond the UK into Europe, but globally, helping to create new jobs in the North and boost the regional economy.”
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.