Deal after deal - A successful year for the Northern Powerhouse Investment Fund II

It’s been a deal-filled year across the North of England, with the Northern Powerhouse Investment Fund (NPIF) making follow-on investments into the existing portfolio and NPIF II investing in a host of small businesses that are delivering a wide array of new products and services across the region.

To date NPIF has provided more than £1bn of direct and private sector co-investment to businesses in the North, creating over 8,000 jobs in the process. A fantastic achievement, this included investment into innovative companies like PolyPhotonix, a Tees Valley-based bio-photonic R&D company, which created an innovative low-invasive and low-cost mask to tackle diabetic retinopathy. It also saw the likes of Robin Valley, an eco-conscious Liverpool jeweller that makes handmade wooden jewellery pieces online, secure valuable finance to expand and create jobs. These two deals showcase the breadth and diversity of the businesses that are part of the NPIF portfolio, serving as incredible examples of what can be achieved through access to finance.

The launch of NPIF II

With such a strong end to the first Fund, there was no doubt that the £660m NPIF II would carry on this momentum. Launching in Leeds, the appetite for investment was undeniable, with leaders across the corporate finance community coming together with a united mission to provide capital to smaller businesses in the North.

After the launch of NPIF II, which now also covers the entirety of the North East, our dedicated fund managers received hundreds of new enquiries from businesses looking for investment, which reflected the demand, but also the funding gap that still exists for smaller businesses and entrepreneurs who operate in harder-to-reach areas. We also welcomed our new fund managers into the fold: Praetura Ventures and NEL Fund Managers, as well as Maven now covering the North East for equity investments. Our fund managers have already had a remarkable impact on the small business community, and we’re looking forward to the many deals they will complete over the years.

Delivering on our three pillars

Throughout the summer, NPIF II made a quick and impactful start, allocating finance towards businesses aligned with the Bank’s three investment pillars: the green economy, underserved areas, and innovation. Over in the North East, Murton-based PowerRoll, a pioneer in the solar energy transition, secured a £4.5m, which went towards helping it fully commercialise its innovative film solar panel. The Fund also provided a loan to Biograd Education, a laboratory education provider in Liverpool founded by Dr Natalie Kenny, which used a six-figure loan to create jobs and buy equipment so it can tender for new contracts. Finally, one of our first deals included Sheffield-based Finlegal, a tech platform that utilises AI and automation for lawyers handling thousands of claims, which raised £1.5m to create jobs and ramp up its international expansion.

Momentum into the new year

This month the Fund signed off its first equity deal in Cumbria, providing £200,000 to ScrubMarine, a robotics company that has created a submersible device that removes biofouling from the bottom of large vessels and tankers. ScrubMarine is one of the many deals completed in December, bringing another successful year for the Fund to a close, setting us up for an active 2025.

Our fund managers have also reported funding milestones to wrap up 2024. FW Capital has announced £11m worth of deals completed, with Mercia reporting £5m worth of deals. Meanwhile, BEF has reported on an active year of deals, delivering nearly £1m in smaller loans on behalf of NPIF II.

In what has been a slower investment period in the UK between 2023 and 2024, there is no doubt that NPIF II has been playing a vital role in continuing to deliver finance to the North, empowering small businesses to grow and attain the funds needed to create jobs, improve products, expand services, and enter new markets. We’re proud of the achievements of NPIF II and our fund managers, but also the entrepreneurs who continue to make their businesses a success in what has been a challenging trading environment not just in the UK, but globally as well. Their hard work is a testament to the resilient and innovative talent we have here in the North, and we’re excited to reach more of these business leaders in the New Year.