NPIF II powering growth in Lancashire and Cumbria

As the Northern Powerhouse Investment Fund (NPIF) enters its second phase with NPIF II, the team is doubling down on efforts to support businesses in the often hard to reach regions of Lancashire and Cumbria. In a roundtable discussion hosted by the Business Desk, key players from across the North West ecosystem came together to share their insights and experiences.

“We’ve already seen good uptake in Greater Manchester, which we’d expect,” explains Sue Barnard, Senior Investment Manager at the British Business Bank. “But we want to do more investments in the harder to reach areas – Lancashire, Cumbria, as well as focusing on female founders and ethnic minorities.”

This sentiment was echoed by Amin Vepari, who leads on business finance and investment for Lancashire County Council and is also Chair of the NPIF II Stakeholder Advisory Board. “If you look at our business population, more than 90% are micro or small businesses. These are often entrepreneurs wearing multiple hats, and navigating funding and finance for the first time,” he says. “We have to make sure the ecosystem is welcoming, open and understanding.”

One business that has benefited from the NPIF II’s support is CCI Photonics, a spin-out from Lancaster University. “Before meeting Praetura, we were lost,” admits founder and CEO Dr. Carlos Alejandro Meza Ramirez. “The application process was straightforward, and the engagement from the team has been invaluable in helping us mature as a business.”

Similarly, Peter Rawlings, founder and MD of Origin OS, a company that provides engineering services and a SaaS platform, shared his experience of working with FW Capital to secure NPIF funding. “We weren’t really aware of what to expect with the process,” he explains. “But Steve from FW Capital was really good at explaining it to us. It wasn’t just about putting us with some money and then moving on – they really got to know our business, our projections, and our growth plans. It was an enjoyable, in-depth process, and ultimately, we got the funds we needed to accelerate our growth.”

Rory Southworth, Investment Ecosystem Manager for Lancashire County Council, who operates out of the bustling business hub of Fraser House in Lancaster, believes building those local connections is key. “We run a number of events where we connect founders and funders together. That’s how we’re seeing a lot of the early stage, tech-enabled businesses come through.”

However, the challenges facing businesses in these regions should not be underestimated. Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce, points to the unique geography of the county. “Cumbria has always been hard to reach. Businesses are cautious, and we don’t have the university spin-outs that other places do.”

However, she added, “just because lots of businesses haven’t benefited, that’s not to say that there aren’t plenty of them who could.” And the Chamber is utilising its networks to signpost members to the explain how they can access funding.

Part of that important business support ecosystem is John McAllister who runs Barclays Eagle Labs in Whitehaven on the West Cumbria coast.

“We start to see the very early signs of spin outs from corporates and organisations and I say to them I can help get them a bit of bootstrap support and meet with other businesses. It’s those businesses that we’ve found would then benefit from the connection into the British Business Bank and NPIF II.”

Chris Boardman, from NatWest, agrees that scale is a major factor. “The smaller businesses, the ones that haven’t been around as long, are the ones really struggling with the increased cost base. Changing shift patterns and multi-skilling staff is much harder for them.”

This sentiment is echoed by Louise Chapman, NPIF II Fund Manager at Praetura Ventures. “We’re seeing funding rounds getting tougher, with angels and institutional investors more cautious. That means we’re having to do a greater proportion of funding rounds than anticipated, as there’s less capital available.”

Yet, despite the challenges, there is a palpable sense of resilience across the region. “SMEs are the core of the economy,” says Joe O’Connor, Investment Executive at NPIF II Fund Manager FW Capital. “They’ve been through so much in the last few years, but they just keep reacting and moving forward.”

One example is a recent £25k investment in a boutique cafe in a deprived area of Liverpool. “It’s in one of our more deprived areas,” explains John Gray from NPIF II Fund Manager River Capital. “But we looked at the business plan, saw the potential, and went for it.”

Suzanne Caldwell believes sharing more of these success stories is crucial. “A lot of businesses are reading the mainstream press and getting themselves into a hole. We need to shout about the amazing things that are happening.”

Simon Cunnington, who leads on NPIF II across the North agrees. “We want to focus on the good stories, to help attract deal flow. But we also need to hear about the difficulties. That’s how we can challenge our fund managers to reach out into new networks and communities.”

The transition from the first NPIF to NPIF II has brought about a significant increase in flexibility and scope for the Fund, which is helping to unlock new investment opportunities across the North West, particularly in sectors that were previously restricted.

“We’ve not tied to European Regional Development Funds since Brexit, so we’ve got less restrictions,” explains Sue Barnard, Senior Investment Manager at the British Business Bank. “We can now do retail, tourism, hospitality – areas that were off-limits before.”

This is a crucial development for regions like Lancashire and Cumbria, where the hospitality and tourism sectors play a vital role in the local economy. As Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce, points out, “Hospitality has always struggled to access support. They just assume it’s not for them.”

Chris Boardman from NatWest agreed, noting that the smaller, more established hospitality businesses have been hit hardest by the recent economic challenges. “The ones that have scale can flex their resources, but the younger, smaller businesses are really struggling with the increased cost base.”

The ability of NPIF II to provide funding to these sectors represents a significant opportunity. As Joe O’Connor, Investment Executive at FW Capital, explains: “The first NPIF was limited in what it could do in Cumbria, but now we can look at hospitality, retail – areas that previously weren’t accessible.”

This sentiment is echoed by Rory Southworth, Investment Ecosystem Manager for Lancashire Council. “It’s opened Cumbria up massively. We can now do hospitality, retail, even nuclear – areas that previously, other funds haven’t been able to fulfill.”

As the NPIF team continues to deploy the £660 million available through NPIF II, having already deployed over £50m in less than a year, the hope is that more of these success stories will emerge, helping to drive growth and revitalisation in the hospitality, retail and tourism sectors across Lancashire and Cumbria.

“It’s not just about the money,” emphasizes Louise Chapman, NPIF II Fund Manager at Praetura Ventures. “It’s about the whole package of support we can provide to help these businesses succeed.”

As the NPIF II team looks to the future, the message is clear – Lancashire and Cumbria are ripe with potential, but require a tailored, community-focused approach. “It’s not one size fits all,” says Amin Vepari. “We have to make sure we’re providing the right conditions and connections for businesses to thrive.”

With the increased flexibility and firepower of NPIF II, the future looks bright for the North West’s overlooked economic powerhouses. As Dr. Meza Ramirez concludes, “We’re a northern company, and we’re carrying the flag. This funding is enabling us to do amazing things.”