The Journal, February 2013
One of the region’s most active venture capital funds has secured an extra £5m in cash to help grow aspiring SMEs in the North East.
Managed by Newcastle-based Northstar Ventures, the Finance for Business North East (FBNE) Accelerator Fund has backed companies in the past such as video games developer Eutechnyx and LED lighting manufacturer Low Carbon Lighting.
It has already invested £14m in 46 high-growth regional businesses and this latest cash injection boosts the total fund size to £25m.
Northstar director Alasdair Greig said: “We have backed a number of great North East SMEs and are now looking forward to being able to invest in even more than we expected over the next couple of years.
“The Accelerator Fund aims to help high-quality, regional businesses develop their business ideas and grow into flourishing SMEs, and demand for funding continues to remain high in these difficult times for borrowers.
“Investees securing finance from the fund are usually expanding companies with a scaleable proposition and a strong management team in place, particularly those coming back for a second or third round of finance as we have seen recently.”
The roll call of businesses supported by Northstar over the last two years reflects the changing nature of the region’s economy and stretches from the Borders down to the Tees Valley.
Recent investments include Reinnervate, AmBX, KyKloud, RePet, Urosens, Lyrachem, Recite Me, AFrame, Beyond Digital Solutions and, most recently, ievo which received a third round of investment, bringing its total from the fund to more than £500,000.
Northstar also manages the £15m FBNE Proof of Concept Fund, and has invested in 90 young high-growth technology businesses, particularly those in software as a service and sustainable energy.
The fund’s investments are generally between £20,000 and £100,000, but it has the ability to complete follow-on investments above this level.
Andrew Mitchell, chief executive of North East Finance, which manages the £125m FBNE programme, added: “Our being able to make this increase in the Accelerator Fund is great news for all those exciting new companies hoping to expand and realise their potential.
“It is one of the most active funds in our portfolio, and we are pleased both with Northstar’s stewardship of the fund and the very positive impact their debt and equity funding has had on driving economic growth right across the North East.”