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5th January 2024

A positive outlook for the Northern Powerhouse Investment Fund


Northern Powerhouse Investment Fund

Debbie Sorby at British Business Bank explores the impact of the Northern Powerhouse Investment Fund throughout the lifecycle of the businesses the Fund has supported. She reflects on the successes of the Fund, and looks ahead towards the exciting transition into the new Northern Powerhouse Investment Fund II.

As the new year begins, the Northern Powerhouse Investment Fund (NPIF) is gearing up to the launch of NPIF II, in early 2024. Since starting in 2017, the Fund has been a catalyst for Northern businesses from a whole range of sectors to start their growth journey. In supporting entrepreneurs on their journey to realise their aspirations, we’ve seen small businesses become international industry leaders, and the creation of a world-class pool of talent.

Despite the challenging economic times the last six years has presented, NPIF has created an excellent blueprint for a successful fund. It has made 1,744 investments across the North West, Yorkshire and Humber and the Tees Valley, directly investing £436m of with an additional £654m of private sector co-investment.

Over this period, we have supported a number of businesses through the entire lifecycle and successfully secured exits, from international private equity backing to high-profile trade sales.

SockMonkey Studios
A fantastic example of this is Middlesbrough based SockMonkey Studios, a pioneering games developer founded by Teesside University graduates, Darren Cuthbert and Bob Makin. SockMonkey first received a £250,000 investment from NPIF – Mercia Equity Finance in 2021. Through the investment, the business was able to triple in size, increasing its headcount from 18 to 45. It also supported in building stakeholder relations with some of the leading publishers and brands including tinyBuild, Sumo Digital, SEGA, and Paradox Interactive.

In February this year, SockMonkey Studios was acquired by Canada’s largest video games studio, Behaviour Interactive. Whilst its founders maintain their roles to power its Northern growth, the exit marks Behaviour’s first European investment, and it is a remarkable demonstration of NPIF success in helping to grow a local Northern business.

Meanwhile, Sheffield-based hospitality technology company, Airship, first received investment from NPIF – Mercia Equity Finance in 2019 and, after three years, it was acquired by Zonal, a leading technology provider. Now, Airship and Zonal have a successful long-term partnership which benefits a shared customer base by allowing hospitality businesses to drive visits and generate pre-visit revenue.

In the North West, Manchester-based inTEC was exited by Maven in 2021 following two tranches of funding at a total value of £750,000 from NPIF – Maven Equity Finance.

The cloud-based provider of end-to-end technology solutions used the funding to build its group infrastructure and hire over 40 people. With a growing team, the business was able to increase its work capacity, leading to the successful acquisition of seven businesses before Maven realised its investment.

InTEC continues to be supported by Duke Royalty, with £7.7m to facilitate the Group’s refinancing, and additional funding to support its ongoing M&A strategy.

A bright future for Northern business
It is incredibly inspiring to see NPIF investment into Northern businesses, creating an environment where industries can thrive. Supporting businesses and the entrepreneurs behind them through the growth journey is the backbone of what the Fund was created to do, so to see it come to fruition is testament to the hard work of NPIF’s partners and stakeholders across the first phase of its journey.

As the Fund enters its next iteration, the £660m Northern Powerhouse Investment Fund II, there are many takeaways to bring into 2024, as well as a refreshed focus of our investment pillars, new areas to target, and, of course, helping even more businesses thrive. It is an exciting time, as we start to see the initial impact of our Nations and Regions funds launch in the South West and the Devolved Nations with NPIF II and MEIF II to follow in early 2024.

The NPIF project is supported financially by the EU using funding from the European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Editors Notes

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