The British Business Bank has allocated more than £57m to five Innovation Clusters across the North of England – more than half the total national allocation of £100m, aimed at supporting high growth businesses aligned with the Government’s Modern Industrial Strategy.

The northern Innovation Clusters are set to receive £17.5m for Greater Manchester, £13.5m for West Yorkshire, £12m for the North East, £9m for Liverpool City Region and £5.5m for South Yorkshire. This funding will be delivered by the NPIF II equity fund managers - PXN Ventures, Mercia Ventures and Maven Capital Partners.

This targeted investment will accelerate the growth of innovation-led sectors identified in the Industrial Strategy as critical to the UK’s long-term competitiveness. Across the North, these sectors include clean energy, advanced manufacturing, digital and technologies, life sciences, and professional and business services. Alongside this, NPIF II will continue to support ambitious businesses across a wider range of sectors in the Northern economy.

The additional funding will build on the existing work of NPIF II, which recently celebrated its second anniversary having facilitated almost £275m into over 400 businesses across the region.

One example of an innovative business NPIF II has supported is Sheffield-based FinLegal, a legal tech company that has developed a platform to help law firms manage large volumes of claims more efficiently. The company secured a £2m investment from NPIF II – Mercia Equity Finance to accelerate its international growth and further develop its technology. Founded in 2019, FinLegal’s platform has processed more than two million claims and is used by leading law firms in the UK and Australia.

The business will use the funding to expand into new markets, develop its platform and create 26 new jobs, all of which will help to drive growth across the professional services sector, a key component of the Government’s Industrial Strategy.

The North is home to some of the UK’s most exciting businesses, yet many have historically struggled to access the capital needed to scale. These new Innovation Clusters will help to bridge this gap, building on the success we’ve already achieved through NPIF II to target the high-growth industries that won’t just be important for regional growth, but also national growth.

The Government’s Modern Industrial Strategy sets out a clear framework for us to work from, allowing us to fully realise the regional strengths we have here. And with the North getting over half of the national allocation, it shows just how much momentum and potential there is here.”

Operated by the British Business Bank, NPIF II is a £660m fund that provides loans and equity finance to Northern smaller businesses that might otherwise struggle to secure investment. It is helping to break down barriers in access to finance, supporting innovation and creating local opportunity for new and growing businesses. The Fund offers loans from £25k to £2m and equity investment up to £5m to help northern businesses start up, scale up and stay ahead.

The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.