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NPIF II completes first South Yorkshire deal with LegalTech company

Press release 24 July 2024

Three men standing on a rooftop overlooking a cityscape.

The Northern Powerhouse Investment Fund II (NPIF II) has completed its first deal in South Yorkshire since the launch of the £660m fund in March this year.

FinLegal - a Sheffield-based LegalTech company whose platform is used by the leading claims firms in the UK and Australia - has raised £2m to accelerate the growth of its client base internationally.

The funding has come from NPIF II – Mercia Equity Finance, which is managed by Mercia and part of the Northern Powerhouse Investment Fund II (NPIF II), and Mercia’s own funds.This marks one of the first completed deals in the region as part of the new £660 million Northern Powerhouse Investment Fund II, launched in March.

FinLegal’s platform is designed for managing class actions or large numbers of similar claims, where a law firm may be acting on behalf of thousands or even millions of claimants. It enables claimants to engage with lawyers more effectively while allowing law firms to benefit from automation and AI and reduce operating costs. FinLegal states that it can enable legal teams to handle up to six times more claims.

The company was founded in 2019 by Steven Shinn, an IT specialist who had been following the news stories about the Post Office group action and recognised the potential to use automation to make the process more efficient. Since its launch in 2020, the platform has processed over 2 million claims and is now used by the UK’s leading mass claims firm Leigh Day, the Australian market leader Maurice Blackburn and a growing number of mid-market firms in the US.

FinLegal, which currently employs 25 staff including three at its US office, more than doubled its annual recurring revenue (ARR) to £1.8m in the year to April 2024, and increased total revenue to almost £3m. The latest funding, which brings the total raised by the company to date to £5m, will also enable it to further develop its product to meet the needs of a wider audience and create 26 new jobs.

The claims market is ripe for a platform like ours. Many claims are run on a no-win no-fee basis and increasingly there are fee caps, so operating costs are critical. Our solution reduces costs, automates but also improves client care and makes it possible to manage claims at a scale which might otherwise not be viable. It has already been adopted by the some of the leading claims firms and this investment will enable us to accelerate our international growth. Steven Shinn
FinLegal represents a new breed of AI-enabled LegalTech companies. The business has rapidly cornered a niche within the mass volume litigation market and is driving substantial productivity gains for major global law firms. Steven and his team have acquired clients across the UK, Australia and in the USA and set their sights on becoming one of the leading litigation platforms globally. Chris Borrett Mercia Ventures
The use of AI is not limited to technology companies, and we are seeing increasing use in the professional services sectors to maximise efficiencies. FinLegal have ambitions to revolutionise the claims and litigation sector, and as one of the first Northern Powerhouse Investment Fund II investments in the region, are a prime example of how the fund can unlock potential, enabling companies to scale in new markets, both locally and internationally. Simon Cunnington Director, Nations and Regions Investment Funds, at British Business Bank,

The £660m Northern Powerhouse Investment Fund II (NPIFII) covers the entire North of England and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium businesses to start up, scale up or stay ahead.

The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North of England. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for the North’s smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

Further Information

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Notes to editors

About the Northern Powerhouse Investment Fund II

  • Operated by the British Business Bank, NPIF II provides a mix of debt and equity funding. NPIF II will offer a range of commercial finance options with smaller loans from £25k to £100k, debt finance from £100k to £2m and equity investment up to £5 million. It works alongside the Combined Authorities, Local Enterprise Partnerships (LEPs), and Growth Hubs, as well as local intermediaries such as accountants, fund managers and banks, to support the North’s smaller businesses at all stages of their development.
  • The funds in which the NPIF II invests are open to businesses with material operations, or planning to open material operations, in: Greater Manchester, Lancashire, Cheshire & Warrington, Cumbria, Liverpool City Region, Leeds City Region, South Yorkshire Combined Mayoral Authority, York & North Yorkshire, Humber and East Yorkshire, Northumberland, County Durham, Tyne & Wear.
  • Supported by Nations and Regions Investments Limited, a subsidiary of British Business Bank plc, the Bank is a development bank wholly owned by HM Government. Neither Nations and Regions Investments Limited nor British Business Bank plc are authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).
  • For investment by NRIL at the sub-fund level 
    The investment from the Nations and Regions Investments Limited into [.] does not amount to any endorsement or warranty from Nations and Regions Investments Limited, the British Business Bank plc or the government of the United Kingdom.
  • For investment by NPIF II sub-fund at the investee company level 
    The investment from the Northern Powerhouse Investment Fund IIinto [.] does not amount to any endorsement or warranty from Nations and Regions Investments Limited, the British Business Bank plc or the government of the United Kingdom.

About Mercia Ventures

Mercia Ventures is a proactive venture capital investor focused on being the first-choice partner for growth. Mercia Ventures makes equity investments of up to £10million across all sectors, with specialisms in Software, Consumer, Healthcare and Deep Tech.

Mercia Ventures is a trading name of investment funds managed by Mercia Fund Management Limited and Mercia Regional Ventures Limited, part of the Mercia Asset Management PLC Group, and sits alongside the Group’s wider private equity, debt and proprietary balance sheet operations. The Group has 11 offices in the UK, and Mercia Ventures’ national footprint and 48 strong investment team draws on their experiences as founders, PhD scientists, software engineers, corporate financiers and management consultants to help our partner companies successfully achieve their ambitions. As at 30 September 2023, Mercia Asset Management PLC has c.£1.5billion of assets under management. Mercia Asset Management PLC is quoted on AIM with the epic "MERC".

The Group raises its own Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) Funds, and details about open offers can be found through Mercia’s website.

Mercia Asset Management PLC is quoted on AIM with the epic "MERC" and includes the following wholly owned subsidiaries -

  • Mercia Fund Management Limited is authorised and regulated by the FCA under firm reference number 524856
  • Mercia Regional Ventures Limited is authorised and regulated by the FCA under firm reference number 183363
  • Mercia Business Loans Limited is authorised and regulated by the FCA under firm reference number 443560
  • Frontier Development Capital Limited is authorised and regulated by the FCA under firm reference number 829697

www.mercia.co.uk

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