Venture capital provider, Mercia Asset Management, increased its support for North West businesses by more than 350% during 2023.
The firm, which has offices in Manchester and Preston, invested more than £39m during the period, its highest amount in any year to date.
Mercia backed 20 companies in the region during the year, compared with 15 in 2022.
The funding comprised venture capital, growth capital and 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.
During the year Mercia exited five North West companies. Manchester tech consultancy Intechnica was sold to US-based Crosslake Technologies, parking reservation platform ParkVia was sold to Manchester Airports Group subsidiary CAVU, while fast growing scientific publisher Texere Publishing was sold to US company BroadcastMed.
Outside of Manchester, Haslingden-based property services specialist Secure Empty Property was acquired by The Clearway Group and Horsefly Analytics, a Knowsley-based HR Tech firm, was subject to a secondary buyout by LDC.
Key investments during 2023 included Manchester-based cybersecurity business Netacea, Invincibles Studio of Preston, the company behind the global football game Soccer Manager, Middlewich-based contractor UK Landscapes and Manchester-based AI specialist Mindtrace.
Mercia invested more than £281m in total during 2023, up 39% on the previous year, with around 77% going to firms outside London in line with its mission to address the funding gap in the region.
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.”
He added: “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: “The investments the Northern Powerhouse Investment Fund has delivered with Mercia across the North West have had a profound impact in the region.
“Not only has this supported in the creation of jobs, but it has also spotlighted the North as a hub for growth, innovation and investment. From tech consultancies to landscape contractors, NPIF has supported a range of businesses that may otherwise have lacked the opportunities to access finance.”
The figures for both 2022 and 2023 include funding from Frontier Development Capital.