A £125m fund set up to help fast-growing North East SMEs with access to finance has just completed its 400th investment.
The deal – which saw South Tyneside-based Beyond Digital Solutions secure funding of £250,000 – was led by the region’s most active venture capitalist Northstar Ventures from its Finance for Business North East Accelerator Fund.
Northstar director Ian Richards said: “As well as delivering this milestone on behalf of North East Finance, it’s also pleasing this was a deal where we partnered with an angel investor – Middleton Enterprises. Leveraging this sort of private investment was always the aim of the programme, and it’s good to see this happening.
“Although the Chancellor is encouraging the major banks to lend to businesses with the right product or idea, we are still finding many good SMEs are unable to obtain bank funding.
“Northstar, on the other hand, is just one of a number of VC companies in the region willing to lend to, and invest in, small companies. We have two funds under management – the Proof of Concept and Accelerator funds – and regularly invest between £50,000 and £500,000 in any one round of finance.
“From these two funds alone, we have invested £20m in 116 early-stage companies and start-ups.
“Unlike money from other sources, we work closely with our investee companies and are able to offer a range of support services and contacts that can benefit a young, growing business.”
Andrew Mitchell, chief executive of North East Finance, added: “Northstar completing this 400th deal is a fantastic achievement and takes us one step closer towards meeting our target of supporting 850 regional businesses through loans or equity investments by 2014.
“We were the first region to create this kind of super-fund – that allows fast-growing SMEs, from different sectors and stages of growth, seven different investment funds within the £125m Finance for Business North East programme.
“Northstar is only one of six fund managers delivering support to businesses from Northumberland to Teesside, thanks to this collaboration between the European Investment Bank (EIB) and the European Regional Development Fund (ERDF).
“And we are confident our aim to kickstart economic growth across the region is having a real impact.”