Transatlantic VC could invest £50m in UK regions
A transatlantic venture capital fund has revealed its plan to deploy £80 million in UK businesses, with potentially £50m earmarked for the regions.
Marc Shirman is investment director at Beringea, which manages $500m in funds in the UK and the United States with over 60 portfolio companies including Manchester-based marketing software business ResponseTap and TH_NK, a digital agency based in Newcastle and Liverpool which was recently sold to global software firm EPAM.
He told BusinessCloud that the landmark £9m investment round in Manchester-based FinTech AccessPay – led by Beringea and including US investors True Ventures and Route 66 – is a sign of further deals to come.
“In the regions there are some really strong opportunities to take companies either straight to the US market or, via London, into Europe and then the US,” he said.
“We plan to deploy a large amount of growth investment in the next two-to-three years by doing more AccessPay-style deals. We are talking £2-10m cheques.
“If we do five deals like that over the next two years in the regions, we could potentially invest £50m in Series A- and Series B-style rounds.”
Shirman says Beringea may invest around 50 per cent of its available UK funds into the regions, with the other 50 per cent heading into London-based companies, but it depends on the opportunities that arise.
“Ultimately we look to back strong teams with scalable propositions,” he explained. “We see 1,100 opportunities a year as a firm and fund between five and ten. I'd expect that to creep up.
“As a growth investor we also look to add value. By being on the ground in the regions we're showing a commitment to the North. We don’t expect our businesses to get on a train and come to London to see us because that's where our office is and has been for the last 30 years.
“We recognise that if we want to be taken seriously, we need to establish a permanent presence and have proximity to the decision-makers in our businesses.
“I don’t know whether you've had long-distance relationships, but I have – and they don’t work. You need to spend time with people and see them face-to-face.
“Even with WhatsApp video and group video on iPhone, it’s not the same as being accessible on a regular basis.”
Shirman, a former co-head of Muzinich & Co.’s UK private capital fund, is heading up Beringea’s new Manchester office at WeWork in St Peter’s Square. He will be supported by Steven Tuckley and Anne O’Loughlin, who have longstanding connections with the firm’s portfolio of Northern companies and the wider investment community.
Beringea’s proposition of helping companies take their products to new markets fits well with the essentially borderless nature of software such as that created by AccessPay and ResponseTap, which has a base in the US.
“I’ve picked FinTech as one to push forward,” said Shirman. “We're starting to see quite clever start-up/scale-up companies that are servicing the larger financial services landscape popping up in the regions.
“London is the financial capital of the world but that's largely reported based on volume of assets and transactions and the scale of the enterprises that service those deals and companies, whereas a lot of FinTech is automating back-office processes and enabling the front office to do their job more effectively.
“While London has a huge amount of front-office representation within the regions, for example with State Street in Manchester, there's a lot of back-office representation too.
“The FinTech opportunity is in understanding how those processes work and what tech stacks needs to be built around them to automate manual processes and make them more efficient.”
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