Mercia invested £59.7m in 2018, with over 90% of the funding going to businesses outside of London and the South East. The figure, up from £48m the previous year, highlights Mercia’s role as one of the UK’s most active investors and a key source of funding for regional SMEs.
Mercia made investments in 137 companies during the year, of which 125 were outside of London and the South East. The figures show that Yorkshire and the Humber (where £15.7m was invested into 57 companies), the North West (£14.3m invested into 24 companies) and the Midlands (£13.3m invested into 22 companies) were the regions receiving the most investment over the 12 months. Mercia invested £2.5m in six companies in Scotland during the year.
During 2018 the group increased its third party funds under management from £350m to over £400m at 31 December, as a result of Mercia being appointed to manage the £23m Proof-of-Concept and Early Stage Equity Fund, part of the Midlands Engine Investment Fund, and the £27m North East Venture Fund, and raising a further £8.0m in EIS funds.
During the year Mercia also opened a Newcastle office and continued to expand its team. It now has over 80 employees in eight locations and partnerships with 19 regional universities. According to recent reports from Beauhurst, Mercia is one of the top four investors into university spinout businesses, and one of the UK’s top four most active venture capitalists specifically focused on innovation.
Growing by approximately 30% annum, Mercia has built a venture portfolio of in excess of 170 companies created and financed via its third party managed venture funds. Using Mercia’s own cash resources it has selectively scaled the most promising companies sourced from this venture portfolio to include synthetic biology company Oxford Genetics, VR company nDreams, speaker company Warwick Acoustics, aluminium shaping company Impression Technologies and bot mitigation company Intechnica.
Mercia has built a reputation as a supportive investor. In a recent survey of portfolio companies, 84% of respondents said they were likely to recommend Mercia to other entrepreneurs and 75% had already done so.
Mark Payton, chief executive of Mercia Technologies PLC, said:
“Regional cities such as Birmingham, Newcastle, Leeds, Sheffield, Manchester and Edinburgh are increasingly important technology hubs, however venture capital remains heavily focused on London. Mercia has offices in all of these locations and as these latest figures show, it is addressing this shortfall by sourcing and backing exceptional businesses across the UK’s regions. Building on a successful 2018, I expect Mercia to continue to scale its activities into 2019.”