Mercia Asset Management – one of the UK’s most active capital providers to SMEs – invested over £120m in 159 companies during 2022, with 79% going to businesses outside London.
They include Nova Pangaea in Teeside, which is developing sustainable aviation fuel; Oxford-based Optellum which has an AI platform for early diagnosis of lung cancer; and Axis Spine Technologies in St Albans which is developing next generation spinal implants.
Other major investments included Birmingham-based Adapttech, which has a smart device for fitting lower limb prosthetics; and I-Phyc which has a ‘green’ water treatment process.
Mercia also successfully exited some of its earlier investments including Sheffield companies Faradion, a world leader in sodium-ion battery technology which was acquired for £100m by Indian conglomerate Reliance Industries; and Azzure IT which was acquired by Content+Cloud.
Other exits included Stockport-based KMP Associates, which has a commercial parking platform and was acquired by the SP Plus Corporation of Chicago; and Southport-based Immersive Interactive, which provides VR training software and was acquired by Echo Healthcare of Florida.
During the year Mercia acquired Birmingham-based SME lender Frontier Development Capital (FDC) in a deal that took its assets under management to circa £1.4bn. It also opened new offices in Bristol and Hull.
Dr Mark Payton, CEO of Mercia, said: “Approximately 60 per cent of the capital we manage is in venture focussed on young businesses with significant growth potential. Venture capital plays an important role in developing the industries of the future but with the majority of funding focused on London, the remaining regions of the UK continue to be underserved. Through our Venture funds and teams operating across the UK, we aim to address that gap.
“Despite the near term economic headwinds as a nation we face, we passionately believe in continuing to support new businesses and our existing portfolio. While many other funders have become more risk averse, Mercia will continue to invest throughout 2023 and we look forward to supporting many more business, through our national network of offices across the UK, in the year ahead.”
Focused on venture, private equity and debt, Mercia offers funding from a variety of capital sources providing as little as £0.5m up to £20m.