Mercia Asset Management invests record £39m into dozens of Yorkshire firms

In 2022, funding was provided to 64 firms.

Over half of the funding was in the form of venture capital, with most of the remainder being loan finance including funding from Frontier Development Capital, which Mercia acquired during 2022.

Following a number of successful exits and new third-party fundraising, Mercia now has almost £400m of capital to deploy across the UK and expects to increase its investment still further in 2024.

Key venture investments in Yorkshire and Humber during 2023 included Leeds-based Envoke, whose platform enables equipment manufacturers to give virtual demonstrations of their products, and IoT start-up FourJaw Manufacturing Analytics in Sheffield.

Follow-on investments included Sheffield-based sensor technology firm Tribosonics, and Hull-based Prop Tech company Bimsense.

Mercia also provided debt funding to support the growth of The Boot Repair Co, which provides a repair and resale service for leading footwear brands, Knottingley-based cycle retailer J’s Cycle Shack, York-based luxury bedding brand Floks and Leeds-based Batch’d, which sells Yorkshire-made artisan bakery products at over 20 outlets throughout the UK.

Mercia invested over £281m in total during 2023, up 39 per cent on the previous year, with around 77 per cent going to firms outside London in line with its mission to address the funding gap in the regions.

Mercia manages assets totalling circa £1.5bn including part of the Northern Powerhouse Investment Fund (NPIF) on behalf of the British Business Bank. It also manages EIS and VCT funds, and institutional capital for private equity and debt deployment.

Dr Mark Payton, CEO of Mercia, said: "At a time when the overall supply of new venture capital has been in decline, Mercia has continued to back compelling businesses located across the UK. 2023 has been a record year for us in terms of the value and volume of transactions and we expect a further marked increase in 2024.

“Our track record shows that our approach helps to nurture rising stars, build thriving start-up and scale-up communities, and create an environment for sustainable business growth in the regions, while achieving returns for Mercia’s fund investors.

“While the economic climate remains challenging, we expect the recovery to start in earnest toward the end of this year.

"We encourage companies to reach out to us now so we can help them strengthen their business and prepare for future growth. We look forward to supporting many more businesses in the year ahead.”

Keira Shepperson, Director of Regional Funds at British Business Bank, said: “Businesses need a diverse range of finance options, which is why the Northern Powerhouse Investment Fund has been dedicated to offering debt finance options.

"Since the launch of the Fund, it has delivered transformational debt funding opportunities, that have helped to boost the Yorkshire and The Humber region, as well as providing access to finance to smaller companies operating in towns outside of the big cities.”