Launch Of The Northern Powerhouse Investment Fund II Provides £660m Boost For North West Small Businesses

The British Business Bank has launched its new Northern Powerhouse Investment Fund II (NPIF II), a £660m fund set to cover the North of England.

Since the launch of the first Northern Powerhouse Investment Fund in 2017, it has delivered over £570m of direct and private sector co-investment into 608 businesses in the North West, creating close to 3,500 jobs.

Aiming to build on the success of the initial fund, Northern Powerhouse Investment Fund II will also drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North.

It 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.

Providing loans from £25k to £2m and equity investment up to £5m, the Fund will continue investing into companies operating within the North West, Yorkshire and the Humber and Tees Valley. It has now expanded to include the whole of the North East enabling businesses across the whole of the North to access the Fund to start up, scale up or continue on their growth journey.

In the North West, GC Business Finance & River Capital will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2 million) and Praetura Ventures will manage equity deals (up to £5 million).

North West businesses that have benefitted from the first Northern Powerhouse Investment Fund include Intechnia, a Manchester-based technology company that was recently sold to US-based Crosslake Technologies, a global advisory firm.

Offering services including digital transformation and technical due diligence, funding from NPIF helped the company expand its consultancy services and grow its cyber security division, Netacea, in the UK, North America and other international markets.

Andy Still, co-founder of Intechnica and chief technology officer at Netacea said:
“The Northern Powerhouse Investment Fund played a vital role in the cataclysmic investment that springboarded our business growth. From the hustle and bustle of Manchester, our businesses grew to become players in the international market.”

In 2022, Netacea became a standalone company.

Elsewhere across the North West is Lancashire-based Fresh Perspecitve Resourcing, which secured NPIF funding in 2023. A recruitment agency launched by sisters Laura and Emily Leyland in 2016, the funding went towards expanding its current team and investing in technology and AI processes.

Laura Leyland, Co-founder of Fresh Perspectives, said:
“Since starting the business in 2016, we have done things differently to typical recruitment agencies. This new loan allowed us to continue doing this with an increased team and explore adding value to new areas of the recruitment process, as well as venturing into HR.”

The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses. From creating hundreds of jobs to developing ground-breaking products, we have seen companies that previously lacked funding options accelerate forward in their growth journeys, which has ultimately benefitted the whole of the Northern economy.

This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase. With further funding available, and a greater geographical reach in the North East, the Northern Powerhouse Investment Fund II will engage more stakeholders across the regions, bringing the business community closer together to create more opportunities for entrepreneurs everywhere.

Following today’s official launch in Leeds, the British Business Bank will be holding a roadshow of events for small business finance intermediaries across the region to provide more information about the Fund. Destinations include Newcastle (18th April); Manchester (24th April), Sheffield (30th April).

Further dates for roadshow events in Liverpool, Hull, Lancashire, Tees Valley, York, Cheshire, Durham, Cumbria and Northumberland will be announced shortly.