The regions are often overlooked by venture capital investors but they hold great opportunities if you know where to look, according to Will Clark, Managing Director of Mercia Ventures.
Mercia, which is one of the most active finance providers to regional SMEs with 11 offices nationwide, invested over £80m in businesses outside of London in the first half of 2023 – equivalent to 85% of its total investment.
Mercia’s approach – which includes building strong local networks and using local investors, deploying a combination of public and private funds, and providing practical support for investee companies – is already paying dividends.
Will Clark says the regions have become a ‘fantastic conveyor belt’ producing exciting businesses which can scale nationally and internationally, as Mercia’s experience show.
During the first six months it achieved a number of successful exits including Middlesbrough games developer SockMonkey Studios, HR Tech firm Horsefly Analytics, parking reservation platform ParkVia, tech consultancy Intechnica and Texere Publishing, one of the world’s fastest-growing scientific publishers.
Will Clark said: “We are very much open for business and the quality of regional SMEs seeking investment has supported this strong half-year result. We have increased both the value and volume of investments during the first half of 2023 and this has been achieved against the backdrop of a difficult economy.
“We believe the regions hold great opportunity if you know where to look. With a nationwide network of offices and local investors, we are very much embedded in these areas and have a track record of identifying rising stars and supporting them to scale and grow, while achieving returns for investors.
“The combination of funding we provide, which includes the use of British Business Bank’s regional funds alongside private investment, has been transformational for regional businesses. It is helping to attract external funding, build thriving start-up communities with a support network of advisers and create a sustainable environment for business growth and job creation.
“Looking ahead we will continue to focus on diversity and inclusion and explore ways to engage with communities that have yet to fully connect to capital providers. We look forward to creating more success stories in the second half of 2023 and beyond.”