First half investments up 24% to more than £94m for Mercia

Mercia Asset Management has enjoyed a bumper first half, with an increase of 24% in the amount invested compared to the first six months of 2022.

Mercia, which is based in Henley-in-Arden and has 11 offices nationwide, has completed 132 investments with a total value of £94.6m in the six months to the end of June this year, compared to 97 investments totalling £76m during the same period last year.

Around 85% of the total value of investment went to firms outside of London, which it said is in line with its mission to address the funding gap in the regions.

The figures for both years include debt funding from Birmingham-based Frontier Development Capital, which Mercia acquired during 2022.

Mercia typically invests sums of £500,000 to £10m. Over half of the funding it provides is in the form of venture capital to early-stage and growth businesses, with the remainder predominantly in differing forms of loan finance. Mercia manages a range of third-party funds including part of the Midlands Engine Investment Fund (MEIF).

It raises its own EIS and VCT funds, and invests directly in some businesses from its own balance sheet. It is committed to expanding its funds under management to meet the growing demand, specifically toward regional businesses.

Key investments during the six months included Zedify, the UK’s largest electric bike parcel delivery network; Medherant, a University of Warwick spin-out developing the world’s first testosterone patch for post-menopausal women; Nottingham-based NuVision, whose product can help heal eye wounds; HR Tech firm Workbuzz of Milton Keynes; and Rugby-based manufacturing and supply chain advisory group Sirius A Corporation.

During the six months Mercia also achieved a number of successful exits, including the sale of Middlesbrough games developer SockMonkey Studios to Behaviour Interactive of Canada; parking reservation platform ParkVia to CAVU, part of the Manchester Airports Group plc; and Texere Publishing, one of the world’s fastest-growing scientific publishers, to US company BroadcastMed.

Sandy Reid, fund principal with Mercia in the Midlands, said: “Despite the flatlining economy, we have we have increased both the value and volume of investments during the first half of 2023. Mercia was founded to bridge funding gaps in the regions and we continue to focus the bulk of our investment in businesses outside of London.

“We believe the regions hold great opportunity if you know where to look. With a nationwide network of offices and local fund managers, 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.

“Mercia remains open for business and has money to invest. 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.”