£660m Northern Powerhouse Investment Fund II to supercharge small businesses in Sheffield

Since the launch of the first Northern Powerhouse Investment Fund (NPIF) in 2017, it has delivered £445m of direct and private co-sector investment into 552 businesses, helping to create nearly 4,300 jobs across the Yorkshire and Humber region.

Aiming to build on the success of the initial fund, the Northern Powerhouse Investment Fund II will now expand to include the whole of the North East enabling businesses across the North to access the Fund to start up, scale up or continue on their growth journey. The Fund will drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.

The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

In Yorkshire and the Humber, Mercia will deliver debt finance (£100,000 to £2 million), as well as equity finance (up to £5 million) to smaller businesses with Business Enterprise Fund (BEF) delivering smaller loans between £25,000 and £100,000.

A business already benefiting from NPIF investment is Productive Machines, an AI startup from The University of Sheffield Advanced Manufacturing Research Centre (AMRC). The business makes advanced machine tool process optimisation technolog and with the funding, it was able to increase headcount, and invest in its technology to create a fully-automated service.

Dr Erdem Ozturk, CEO at Productive Machines, said: “Our vision has always been to use our research and innovation to spearhead us as a leader in the manufacturing industry. With the support of the Northern Powerhouse Investment Fund, we’ve been able to invest in our R&D and create benefits which are accessible to manufacturers of all sizes.”

Another business is Tribosonics, a Sheffield-based company which creates smart sensors to make data around asset performance visible to industry, reducing waste and improving efficiency. The business received an investment from the first Northern Powerhouse Investment Fund to enrich its portfolio of patented products and services.

Glenn Fletcher, Tribosonics CEO, said: “At Tribosonics, our aim is to deploy our smart end-to-end sensing products to our industrial customers, to enable them to improve asset and process performance, and thus make a significant contribution to decarbonisation. The finance the Fund has provided us with has allowed us to build our team and deploy new products and grow our customer offerings. Also, the network we have built through the Fund’s connections has provided us with invaluable relationships which have supported us in growing our digitally enabled hardtech business.”

Kevin Hollinrake MP, Minister of State for Enterprise, Markets, and Small Business, said: “This new fund will unlock millions in equity and loans for SMEs across the North to realise their full potential and builds upon British Business Bank’s vital work ensuring that any small business owner in the UK can scale up and grow.

“SMEs are the engines of growth for our economy and across government we are improving access to finance, cutting red tape and removing barriers to ensure that they can go further and faster than ever before.”

Louis Taylor, Chief Executive of the British Business Bank, said: “The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses. From creating hundreds of jobs to developing ground-breaking products, we have seen companies that previously lacked funding options accelerate forward in their growth journeys, which has ultimately benefitted the whole of the Northern economy.

“This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase. With further funding available, and a greater geographical reach in the North East, the Northern Powerhouse Investment Fund II will engage more stakeholders across the regions, bringing the business community closer together to create more opportunities for entrepreneurs everywhere.”

Following today’s official launch in Leeds, the British Business Bank will be holding a a roadshow of events for small business finance intermediaries across the region to learn more about the Fund. Destinations include Newcastle (18th April); Manchester (24th April), Sheffield (30th April).

Further dates for roadshow events in Liverpool, Hull, Lancashire, Tees Valley, York, Cheshire, Durham, Cumbria and Northumberland will be announced shortly.