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Back to News Sean Hutchinson, Senior Investment Manager at the British Business Bank

9th August 2022

Business Matters: Role of NPIF in supporting innovation-led businesses


Northern Powerhouse Investment Fund

Sean Hutchinson, senior investment manager at the British Business Bank, discusses key findings from the latest Backing Innovation Report and the fundamental role the Northern Powerhouse Investment Fund  plays in driving forward the success of innovation-led businesses across the North.

The North is a hotbed of innovation, we can thank the Tees Valley for the world’s first public railway, Yorkshire for the world’s very first football club, and the North West for birth of the industrial revolution. That pioneering spirit remains today, with the North home to a wealth of innovation-led businesses, particularly university spin outs and those born out of research and development activities.

There is huge potential for these innovative growing businesses to drive the UK forward and have a measurable impact on the regional economy. A recent report from the British Business Bank, UK Research & Innovation and Innovate UK – Backing Innovation-Led Businesses 2022 – is a reminder of how innovation and funding go hand in hand.

The Backing Innovation report brings to life how access to finance – through funds such as the Northern Powerhouse Investment Fund’s (NPIF) equity and debt finance packages – produces a domino effect on the future growth of innovation-led businesses. In fact, as a recent evaluation report found, as much as 69% of NPIF recipient respondents reported introduction of more efficient processes and 68% introduced new products or services to market. Meanwhile, as many as 93% of surveyed equity recipients and 53% of debt recipients reporting increased investment in R&D thanks to NPIF funding.

It just goes to show how pivotal public funding is to innovation-led businesses. With the correct financial support in place, these Northern-based businesses contribute to the vision of an innovation-led, high skills and knowledge-based UK economy.

Working with our partners, we have established an efficient approach to financial support for innovation-led businesses. Relative Insight, Slingshot Simulations and Materials Processing Institute (MPI) are three examples of Northern businesses that have been supported through R&D project funding and that have secured investment from NPIF.

Lancaster-based Relative Insight was born out of a 10-year research project with Lancaster University’s linguistic and cyber security departments. In the beginning the company used its language analysis technology to help law enforcement agencies identify criminals masquerading as children in chat rooms. It secured a £1m investment from NPIF – Maven Equity Finance as part of a £4m investment round in 2019.

Slingshot Simulations is a University of Leeds spin-out which allows businesses to use advanced computer simulations to test news ideas and make better decisions. It secured a £500,000 investment from NPIF – Mercia Equity Finance to further develop its technology and break into new markets.

In the Tees Valley, not-for-profit research and innovation centre, Materials Processing Institute (MPI), secured funding worth £750,000 from NPIF – FW Capital Debt Finance. The research centre, which focuses on advanced materials, industrial decarbonisation, and waste reduction in the circular economy, used the funding to invest further in its asset base and technologies.

The Backing Innovation report acts as a timely reminder of the importance of securing appropriate funding to help launch companies and initiatives that have the potential to drive the UK forward. I would urge any innovation-led business considering investment to visit as a first step, to understand how the fund could support your vision for the future.

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

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