A Middlesbrough start-up which could revolutionise the way companies price their products has raised £650,000 from NPIF – Mercia Equity Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund, and private investors.

Bubo.AI’s platform uses artificial intelligence (AI)  to analyse customers’ behaviour to understand what they are willing to pay, then recommends the optimum price to sales staff. The company also supports sales staff to avoid them giving unnecessary discounts.

The platform, which is designed for wholesalers and distributors such as builders’ merchants and food services, allows them to base their prices on customer value rather than cost or other methods, yielding on average a 3 per cent increase in profit.

Bubo.AI has been co-founded by serial entrepreneur Alan Timothy and Polish data analyst Marcin Lisowski who had previously worked together to create a pricing system for a global autoparts supplier.  After failing to find a solution on the market that satisfied their need, they decided to build one themselves. As a result, the company increased profits by almost £2m in just six months.

The two men joined forces with leading AI expert Professor Huseyin Seker of Staffordshire University, and ex-Microsoft marketing veteran David Shell to develop their ideas and create an off-the-shelf solution. Bubo.AI, which was launched in 2019, is now used by clients including Tarmac, while the company has partnered with Teesside University and other institutions to promote the use of AI in pricing. The funding will allow the firm to scale its operations rapidly across Europe and North America.

Alan Timothy, who is CEO of Bubo.AI and who is also founder of software firm i-snapshot, says: “Pricing has previously appeared like a dark art, and traditional approaches are problematic and not very effective. Trying to price match with competitors can lead to price erosion, especially in a downturn, while sales staff often resort to discounting to meet targets.

“Now for the first time our solution means companies can use customer value-based pricing, which could be key for them to recover revenue and build a roadmap to profitability in the post-Covid world.”

Simon Crabtree, Investment Manager at Mercia added: “Research shows that smart pricing is the most effective way to increase profits. However getting it right is difficult, especially for big distributors or wholesalers with many different products and branches. Bubo.AI could help companies to revolutionise their approach to pricing and transform their profitability.”

Tees Valley Mayor Ben Houchen said: “Bubo.AI is a great example of an amazing digital company that’s gone from strength to strength right here in Middlesbrough and just goes to show just how much digital talent Teesside, Darlington and Hartlepool has to offer. Our tech and digital firms are helping our businesses, and those across the country, with the problems they face with practical, innovative systems that allow them to get more business done. This will be even more important as we begin to focus on economic recovery following the coronavirus pandemic.

“I wholeheartedly support our innovators, job creators and entrepreneurs, and thanks to the money invested via NPIF, Bubo.AI can continue its successful growth across the globe.”

Sean Hutchinson, Senior Investment Manager at the British Business Bank said: “It’s great to see high-growth companies like Bubo.AI in Teesside using NPIF funding to accelerate their growth globally. As a new software platform, Bubo.AI has the potential to boost regional and economic prosperity which is exactly what NPIF set out to do.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.



SockMonkey Studios, a Middlesbrough-based games developer, has secured £250,000 from NPIF – Mercia Equity Finance, which is managed by Mercia and part of the Northern Powerhouse Investment Fund, to launch its first original game.

SockMonkey is set to bring Fish Tanks to market this summer. It will be available on PlayStation 4, Xbox One, Switch, PC and mobile phone platforms.

SockMonkey was founded in 2013 by Darren Cuthbert and Bob Makin. They were later joined by Darren Falcus, who co-founded Optimus Software – one of the first video game studios on Teesside which was later sold to US publishing giant Acclaim Entertainment.

SockMonkey has seen rapid growth in recent years and increased headcount by 50 per cent in 2019. Its recent projects include adapting the popular PC game Deliver Us The Moon for PlayStation 4 and Xbox One, as well as developing the Nintendo Switch version of Prison Architect.

The award-winning studio, which currently employs 18 staff, plans to create a dozen new jobs by the end of this year, and almost triple its staff numbers to 50 by 2021 to support growing demand.

As well as the investment, SockMonkey will also receive practical support from Mercia’s games expert Ron Ashtiani, the former CEO and now Chair of Sumo Group’s Atomhawk business.

Bob Makin, CEO, said: “Having created many hits for other games companies, we are excited to now be launching our first original title later this year, and have additional games already at the prototype stage. With the next generation of video games consoles due to be released by the end of 2020, there’s no better time to create the region’s first ‘superstudio’, putting SockMonkey – and the wider Tees Valley games development community – on the map. This funding, along with Mercia’s knowledge of the games industry, will help us to do that.”

Simon Crabtree of Mercia said: “SockMonkey is a successful studio with a talented and ambitious team. Developing its own games will allow it to benefit from ongoing royalities and add value to the business. With the gaming sector continuing to grow rapidly, it bodes well for the future of the company and the Teesside games industry.”

Tees Valley Mayor Ben Houchen said: “SockMonkey has played a key part in Middlesbrough’s vibrant digital and creative sector for years, and the latest welcome news of the launch of their first original game is set to drive its growth even further.

“Thanks to money invested via NPIF, SockMonkey is going from strength to strength. As well as creating real jobs for local people, it’s another example of businesses in Teesside, Darlington and Hartlepool going global with their products, showing our expertise on the world stage.”

Sean Hutchinson, Senior Investment Manager at the British Business Bank, said: “It’s fantastic to see a northern business establishing itself within the thriving gaming sector with its first original title. The NPIF investment will help SockMonkey realise its growth ambitions and create new, highly-skills jobs in the Teeside region. We are proud to work with Mercia and our other fund managers – particularly during this time – to encourage growing businesses to prosper.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

A biotech business has raised £1.2m for a new hand-held device that allows paramedics and emergency doctors to diagnose patients who are having a stroke.

Sarissa Biomedical has secured funds from a consortium of investors including the MEIF Proof of Concept & Early Stage Fund, which is managed by Mercia and part of the Midlands Engine Investment Fund, Mercia’s EIS funds, and private investors including Wren Capital and the Wood Family

Sarissa’s new system will be the first of its type for stroke patients and could help improve the prognosis for victims by allowing doctors to diagnose and treat them more quickly. The SMARTChip device can be used on location or at the patient’s bedside and gives results in around five minutes. It contains a disposable biosensor chip which analyses a fingerprick sample of blood and measures the level of purines – chemicals released into the bloodstream within minutes of a stroke.

The funds will allow Coventry-based Sarissa to carry out a clinical study with the NHS and Newcastle University Stroke Research Group, and invest in product manufacture. Established in 2002 as a spin-out from Warwick University, Sarissa produces biosensors for the medical and academic research market.

Stroke is the fourth most common cause of death in the UK and a major cause of adult disability, with stroke care accounting for around five per cent of the entire NHS budget. While effective treatments are available, they need to be used promptly after an attack but currently there is no fast and reliable way to tell if a patient has had a stroke. Patients are assessed on their symptoms and then sent for a CT or MRI scan to confirm the diagnosis. The SMARTChip system also has potential for use in diagnosing other conditions such as heart attacks, peripheral artery disease and foetal hypoxia or ‘blue baby syndrome’.

Dr John Clarkson, CEO of Sarissa, said: ‘This investment is a strong signal of support from Mercia and our other investors and will enable us to begin the clinical evaluation process. We are pleased to say that, despite the current lockdown, we are able to press on with the clinical trials as planned with the aim of bringing this important new test to market as soon as possible.”

Dr Jo Slota-Newson of Mercia said: “This new tool from Sarissa represents a major step forward in reducing the huge toll of disability caused by stroke and relieving the burden on the NHS. Ultimately it could help millions more people by providing a fast and reliable way to diagnose other conditions such as heart attack, enabling patients to benefit from more prompt and effective treatment.”

Ken Cooper, Managing Director at the British Business Bank, said: “The MEIF is still very much open for investment and is committed to driving Midlands’ innovation. This funding into Sarissa is a good example of that. The MEIF investment should allow the company to enter a new growth phase as it progresses clinical studies and invests in its manufacturing capabilities.”

Sean Farnell, board director at the Coventry and Warwickshire Local Enterprise Partnership, said: “Coventry and Warwickshire has an excellent reputation for innovation and Sarissa is a perfect example of this. The next stage of its growth has the potential to change lives and this investment will enable Sarissa to take its business to the next level and really make a difference to stroke patients.”

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Mercia Asset Management PLC is pleased to announce that the British Business Bank (“BBB”) has accredited the Group to deliver its Northern Powerhouse Investment Fund (“NPIF”) debt mandate under the new Coronavirus Business Interruption  Loan Scheme (“CBILS”).

CBILS provides financial support, via its accredited lenders, to smaller businesses (“SMEs”) across the UK that are losing revenue and seeing their cash flow disrupted as a result of the COVID-19 outbreak. BBB’s accreditation will enable Mercia to increase its lending, initially across its existing portfolio, and ultimately to all eligible regional SMEs.

Dr Mark Payton, CEO of Mercia Asset Management, said: “Through our managed funds we have been lending to ambitious small businesses in the UK regions for over 20 years. With a portfolio of over 400 companies across our venture, private equity and debt funds, we have considerable experience of supporting businesses through previous economic cycles and are familiar with the cash flow demands that arise during times of economic stress. We are therefore pleased to be able to play our part, in conjunction with NPIF and BBB, as we continue to deploy capital during the COVID-19 outbreak, to those regional SMEs that need it most.”

About Mercia, BBB and CBILS

Mercia now manages £187.7million on behalf of the BBB, having recently been allocated an additional £54.3million to its existing NPIF equity and debt investment mandates. The Group’s relationship with BBB started in 2016 when Mercia was awarded both NPIF debt and equity mandates, having successfully managed previous JEREMIE Funds launched in 2010.

Mercia is lending through NPIF and can provide term loans from £100,000 up to £750,000 to SMEs, with a focus on Yorkshire and the Humber regions. Find out more here.


A Newcastle tech company whose software allows businesses to create their own mobile apps has raised £1.2m to further develop its product and expand its team.

Nutshell Software has secured investment from two funds managed by Mercia – the Northern Venture Capital Trust (VCT) Funds and the North East Venture Fund (NEVF), which is supported by the European Regional Development Fund.

Nutshell’s software offers a simple way for businesses to create their own fully functional mobile apps in minutes – with no coding necessary. Launched in 2017, it is already being used by many public and private sector organisations including Network Rail, Siemens, Northumbria Police and the NHS. The company, which currently employs 12 staff, expects to create around 40 new jobs in the next three years.

Nutshell was launched by serial entrepreneur Martyn Cuthbert, a former civil engineer who recognised the potential of new technology while working in the rail sector. His launched his first IT business OnTrac in 2007 and sold it to Tracsis plc in 2016.

Martyn hopes that Nutshell will make mobile apps accessible to organisations of all sizes.

He says: “With 3.5 billion smartphones worldwide, mobile apps are an effective way for public and private sector businesses to roll out their services to a wide audience. Nutshell makes mobile app development easy and will help businesses large and small to drive innovation and growth.”

Aaron Lawson-Clark and Jan Oosthuizen from the Mercia team led the deal. Aaron said: “Nutshell stood out with both a market-leading product and a management team with experience in building a successful software company.  Mercia is pleased to be backing another fantastic business in the North East of England.”

Square One Law provided legal advice to Mercia on the deal. NEVF can invest up to £1.0million in any one round for firms in Northumberland, Durham and Tyne & Wear, particularly those which are engaged in innovation or developing disruptive business models.
Funding is available to all companies with high growth potential and also pre-start enterprises.

The Northern VCTs, which provide series A venture investment of up to £5million for high growth SMEs, are amongst the longest-established funds of their type in the UK.



IBEX Innovations – the Sedgefield company which is a pioneer in  X-ray imaging technology – has raised £535,000 to commercialise its new software to help detect breast cancer.

The latest funding has come from existing backers the North East Venture Fund (NEVF), supported by the European Regional Development Fund and managed by Mercia, along with IP Group and private investors.

IBEX’s Trueview® technology not only improves the quality of X-ray images but also reduces the dose of radiation the patient receives.  The software, which incorporates advanced physics and artificial intelligence, can be used with conventional  X-ray machines and allows medics to interpret images more accurately.

After five years in research and development, IBEX has recently made its first sales to Curvebeam, a US company specialising in 3D imaging of arms and legs and to Planmed, a leading manufacturer based in Finland which supplies to over 70 countries.

The latest Trueview software is designed for use in mammography and has been shown to aid diagnosis by increasing image contrast while reducing radiation exposure by up to 50%. It could also help reduce breast compression to minimise discomfort and encourage more women to have screening. The latest funding, which brings the total IBEX has raised to date to almost £6m, will be used for ongoing product development and to secure new international customers.

Neil Loxley, CEO of IBEX, said: “We are grateful for the continued support of investors in this latest funding round, which will enable us to complete development of our latest product and maintain our technical lead in the $15bn medical X-ray imaging market. 2020 will be an important year for IBEX as we secure new deals with leading global medical imaging companies.”

Ian Wilson, who leads Mercia’s team in the North East, added: “IBEX is the only one in the market that can achieve this quality of images. The company continues to make progress in both developing new products and new commercial relationships. Mercia is delighted to support IBEX once again and help roll out this new system which will be an important step forward in breast cancer detection.”

Oliver Rickett from Womble Bond Dickinson provided legal advice to Mercia.

NEVF can invest up to £1.0million in any one round for firms in Northumberland, Durham and Tyne & Wear, particularly those which are engaged in innovation or developing disruptive business models.
Funding is available to all companies with high growth potential and also pre-start enterprises.





A company with an eco-friendly water treatment system that can reduce pollution levels has raised £550,000 to help roll it out to the water industry.

Industrial Phycology (I-Phyc) has secured a second round of funding from the MEIF Proof of Concept & Early Stage Fund, which is managed by Mercia and part of the Midlands Engine Investment Fund, and private investors.

Recent trials at Weston-super-Mare sewage works have proved that I-Phyc’s system consistently ensures that wastewater meets the strict new limit for phosphorous levels – a standard many water companies are unable to achieve economically with current technology. I-Phyc, which is based in Birmingham and has laboratories in Bristol, is already in discussion with water companies for the first units and, with the sales pipeline growing faster than predicted, it is planning to raise further investment in the coming months to help it meet demand.

I-Phyc’s system uses the natural power of algae to reduce pollutants such as phosphorous and nitrogen. Its photo-bioreactor system is more effective than other algae systems as it penetrates deep below the water surface, reducing the size of tank required and making it ideal for smaller treatment plants. The process also produces biomass that can be used to generate biogas, fertilizer or printer ink and it captures carbon, helping operators to reduce their carbon footprint.

The latest funding brings the total raised by the company to over £1.2m and will support its plans to create 25 new jobs over the next five years.

Russell Bright, the company’s CEO, said: “Only 14 per cent of UK rivers meet the minimum standard for water quality and although new regulations impose a ten-fold reduction in phosphorus levels, many sewage plants cannot achieve this. I-Phyc’s system offers a natural solution that could help clean up our coasts and rivers. We are delighted that our existing investors are supporting this second fund round which is a great endorsement of their faith in the technology.”

Jo Slota-Newson, Investment Manager at Mercia, added: “Water companies are eagerly searching for new technologies to help them meet the new standards. Following the success of the recent trials, I-Phyc has seen very strong interest from them. This latest funding round will allow it to expand its team and start supplying its systems to the industry.”

Grant Peggie, Director at the British Business Bank, said: “From its Birmingham base, I-Phyc has developed an innovative new water treatment system with huge potential. This marks the second investment round the MEIF has supported, with the Fund helping to support the firm’s long-term growth. Further demonstrating how this fund can make a real and measurable difference to growing innovative businesses across the Midlands Engine region.”

Pat Hanlon, Board Director for Access to Finance at GBSLEP, said: “Helping to support innovative businesses like I-Phyc is high on our agenda at GBSLEP, and this is an excellent example of how providing funding can help create products which will play an extremely important role in supporting the environment. We’re excited to see this new funding help the team at I-Phyc grow and expand and continue its impressive work.”

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.


Mercia Asset Management, which is one of the most active investors in regional SMEs, has invested over £11m in the seven weeks since the lockdown began. The company says it is still open for businesss, having completed 26 transactions during the crisis including new investments and support for its existing portfolio companies.

Mercia – which has around £300m in unrestricted free cash within venture capital, private equity and debt to invest – is urging entrepreneurs and business owners to press ahead with their growth plans as the business community now focuses on how lockdown is being unwound. Mercia’s CEO Mark Payton says it is now more important than ever that businesses outside London receive their fair share of both investment and government support, or the regions face losing the gains they have made in recent years.

“With nearly 80% of high-growth businesses based outside of London, regional SME investment will be crucial to economic recovery and to building the technology and healthcare industries of the future,” he says. “Regional SMEs have historically been underserved by finance providers. During the financial crisis of 2008 the funding disparity between London and the UK regions rapidly grew, with investment in the North and the Midlands falling by circa 70% compared to a 55% drop in London and the South East.

“It took until 2018 for regional investment to recover to pre-crisis levels. Since then we have made real progress in closing the gap and many regional cities are now thriving hubs. However, the predicted recession caused by COVID-19 could be even deeper than the last and we must ensure the regions don’t suffer disproportionately once again.

“Mercia is committed to supporting regional SMEs over the long-term, and has the funds and experience to do so. However, we need to ensure that the regions have access to relevant and immediate public sector funding  and a voice in designing any of the national measures that government will be rolling out post-COVID-19.”

Payton said the new trading environment required innovative thinking on how to make better use of existing capital solutions. For instance, relaxing the ‘seven-year’ rule which prohibits Venture Capital Trust (VCTs) from supporting more established businesses could release some £600m to kickstart the economy.

Mercia has around 400 portfolio companies throughout the UK and around £800m of assets under management, through its own capital and the funds it manages on behalf of third parties.

Payton said businesses also had a role to play and should not be deterred by the prospect of a downturn. He added: “Some of the most exciting businesses we see today – including some of the healthcare firms involved in the fight against COVID-19 – started up in the wake of the last recession.

“Unlike then, this time there is investment capital available from Mercia and other sources. It is vital that entrepreneurs and managers with valid commercial prospects continue to pursue their ambitions as by doing so, they will be playing their own part in their region’s, and thus the UK’s economic recovery.”


Medherant partners with Cycle Pharmaceuticals to develop new products using TEPI® Patch technology

Mercia is pleased to announce that Medherant Ltd (“Medherant”), the transdermal drug delivery company in which it holds a 30.1% direct stake, has entered into a partnership with Cycle Pharmaceuticals (“Cycle”) to develop new products using Medherant’s proprietary TEPI Patch® technology.

Under the terms of the partnership, Medherant will receive an initial upfront licence payment with an additional upfront payment for each candidate drug targeted. Medherant will also receive royalty payments on future sales of the products developed under the partnership, using the TEPI® Patch platform.

Work will commence immediately on the first two products, which will be reformulations of medicines used to treat rare neurological disorders, an area where improvements in ease of use are vital for compliance and quality of life. Some of the benefits of the TEPI® Patch technology include less frequent drug administration, reduced side effects and improved patient compliance. Following TEPI Patch® formulation development by Medherant, Cycle will be responsible for clinical development and registration, and will commercialise the products arising from this collaboration.

About Medherant and Mercia’s investment

Medherant is a University of Warwick spinout.  Mercia first invested in Medherant through its third-party managed funds in 2015, and then subsequently via its own balance sheet. Since then Medherant has built out its board and management team, expanded its intellectual property estate, demonstrated the broad applicability of its technology and developed scalable production. The company has two unpartnered lead products of its own: an Ibuprofen patch at clinical stage and a pre-clinical product addressing smoking cessation.

Dr Mark Payton, CEO, Mercia Asset Management and NED on the board of Medherant, said: “The collaboration with Cycle is an important development for Medherant and one which could ultimately help improve the lives of many patients suffering with rare neurological disorders. This is a great example of how Medherant’s innovative technology for the administering of medicines can create significant benefit for end-users. We are pleased to have supported Medherant for a number of years and look forward to them building on this success.”

StaffCircle – the Leicester-based HR software company – has raised a further £775,000 to build its sales and marketing team and expand its client base.

The latest funding round was led by Blackfinch Investments and included the MEIF Proof of Concept & Early Stage Fund, which is managed by Mercia and part of the Midlands Engine Investment Fund.

The StaffCircle platform is designed for medium to large companies and enables them to improve internal communications, engage more effectively with employees in different locations, manage their performance and maintain a consistent culture.

StaffCircle was founded in 2017 by Mark Seemann, who has previously built and sold three successful software businesses. The business, which currently employs 10 staff, plans to create a further five jobs to allow it to respond to growing interest from potential customers and generate new leads. The latest funding follows a £250,000 investment from the Midlands Engine Investment Fund in 2019.

Mark Seemann, the CEO, said: “The mission for StaffCircle is simple – to capture collaboration between staff, from front-line to top management and everyone in between. Quite often, businesses grow and communication breaks down, especially with a disparate workforce. It’s exactly what happened to me over the years and that’s how StaffCircle was created. This platform is about interacting with staff and empowering them but perhaps more importantly, at a time like this, it’s also about maintaining communication when businesses are not able to do so face to face.”

Dr Reuben Wilcock, Ventures Director at Blackfinch, added: “StaffCircle clearly has tremendous potential. We’re delighted to be backing it at such an early stage.”

David Baker, Investment Associate with Mercia, said: “Mark is an experienced entrepreneur who has developed a great product and built a loyal customer following in a relatively short period of time. This latest funding round will give the company the resources it needs to sign up new potential customers and increase its revenue stream.”

Grant Peggie, Director at the British Business Bank, said: “A key aim of the Midlands Engine Investment Fund is to ensure that Midlands businesses have access to the increased levels of finance they need to grow. This latest investment will enable StaffCircle to increase its business development and create a range of new employment opportunities.”

Kevin Harris, Chair of the Leicester and Leicestershire Enterprise Partnership said: “I’m delighted that StaffCircle has secured this additional funding from the Midlands Engine Investment Fund, to help the business realise its growth plans over the coming years. Leicestershire is a hub for innovative businesses, and StaffCircle is leading the way when it comes to securing the investment it needs to innovate by developing new software products and creating new jobs.”

Mike Jackson of Browne Jacobson in Birmingham provided legal advice to Mercia on the deal while Peter Mayhew of Shakespeare Martineau advised Blackfinch.

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.