Mercia Asset Management invested more than £23.7m in Yorkshire and Humber businesses during 2022.
Mercia backed 62 companies during the year including Leeds-based Little Journey, which has developed an app to help reduce anxiety in children undergoing surgery; Sheffield-based smart sensor business Tribosonics; nurse call systems specialist Arquella, and Hull-based Operation, which develops building information software.
The firm also exited a number of its previous investments, including four Sheffield-based businesses. Faradion, a sodium-ion battery technology company, was acquired for £100m by Indian conglomerate Reliance Industries, which is investing a further £25m in the site. IN-PART, an academia-industry collaboration platform, was acquired by Inova, while hospitality tech firm Airship was acquired by industry leader Zonal, and Azzure IT by Content+Cloud.
In December, Mercia opened a new office in Hull to expand its presence in the Humber region and complement its existing office in Leeds.
Will Clark, managing director of regional venture funds at Mercia, said: “Venture capital plays an important role in developing the industries of the future but with the majority of funding focused on London, the regions continue to be underserved. Mercia aims to address that gap.
“After years of investing in Yorkshire and Humber, we are now seeing the results, with some of the businesses we have backed emerging as leaders in their field and attracting attention from international buyers or investors.
“One of the benefits of being in the North is that costs are lower and investment goes further, which is a real strength in the current climate. And while the cost of hiring and retaining developers has been a key challenge for regional tech companies in the past, there are signs that wage inflation is starting to ease.
“Despite the economic outlook, we see lots of opportunity in Yorkshire and Humber, with many exciting new businesses and cutting-edge technologies. While some of the other funders have become more risk averse, Mercia will continue to invest throughout 2023 and we look forward to supporting many more businesses in the region.”
Mercia provides funding from a range of sources including the Northern Powerhouse Investment Fund (NPIF) and its own funds and invests mainly in the regions outside of London.