Mercia Fund Managers has been awarded the £27 million Venture Fund to support businesses across the North East region.
The fund makes up part of the £120m North East Fund, which is supported by The European Regional Development Fund.
The Venture Fund will be investing in rounds up to £1m, with additional funding potentially coming from Mercia’s other funds, and will be targeted at businesses at any stage of their development with a particular focus on innovative businesses.
Mercia will be opening a new office in Newcastle – its ninth office in the UK – and the fund will be available to SMEs across Durham, Northumberland and Tyne and Wear.
Mercia is already active in the North East region with recent investments including Newcastle-based digital VR specialists Luminous Group and AI software sales company Refract.
“The North East has much to offer and we are thrilled to have been awarded this latest fund, which will be an invaluable source of funding for the development of innovative businesses,” Mercia CEO Dr Mark Payton said.
“The investment team will be led by Ian Wilson, an experienced fund manager and existing Mercia employee who has strong links within the region.
“Addressing the imbalance of available capital in the UK regions is a key strategic focus for Mercia and with a strong track record of supporting businesses with high growth potential, we look forward to sourcing and scaling the next generation of emerging stars and working with the North East Fund and other partners from the region.”
This follows a succession of contract wins for Mercia amounting to in excess of £200m, which includes the recent award of a £23m Proof-of-Concept and Early Stage Equity Fund, part of the Midlands Engine Investment Fund, £108m of the British Business Bank’s Northern Powerhouse Investment Fund, the first closing of EV Growth II with initial commitments totalling £45.1m and £11.8m in Enterprise Investment Scheme (EIS) capital.
Andrew Mitchell, chief executive of The North East Fund Limited, said: “Mercia is one of the leading early-stage investors in the UK.
“They have a breadth and depth of expertise which will make a real difference to the venture capital sector in the North East.
“We are delighted to welcome them to the region.”
The chief investment officer of tech investment group Mercia Technologies recently decided to step down.