The fund, which is part of the overall £155m North West Fund initiative provided jointly by the European Regional Development Fund and the European Investment Bank, was allocated £15m to invest at the outset and it is tasked with fully investing the £15m by the end of December 2015.
Investments range between £50,000 to £1.5m and are aimed at faster-growing businesses who require a more flexible equity and funding package than these companies are likely to find from the high street banks or other traditional lenders.
The fund can only hold a minority stake in its investments. The exit strategy is normally aimed at between three to seven years.
The finance can support a broad range of needs; from start-up and early stage development through to research and development, capital equipment and expansion planning. However, the fund cannot support MBOs or acquisition finance, i.e. monies that don’t go directly/entirely to the company.
The types of companies the fund is targeting include advertising, creative and digital agencies, the broader digital and ICT sector, music, publishing, radio and television, software, computer games and electronic publishing.
The fund is managed on behalf of the North West Fund by AXM Venture Capital whose MD, Fred Mendelsohn, operates out of the fund’s three offices spanning London, Manchester and Liverpool.
David Smith oversees the fund in the North West and he is supported by two further managers in Joanne Evans and Rupert Wingate-Saul, along with support staff in the two North West offices.
To date there have been 15 investments: seven in Liverpool, four in Cheshire, two in Lancashire and two in Greater Manchester.
Each of the North West Funds has a mandate to focus particular support on investment in Merseyside, a mandate which is transparently illustrated by the figures.
The 15 investments to date are:
June 2011 Manchester e-commerce software developer Camiloo
June 2011 Daresbury e-learning platform developer Autology World
July 2011 Lancaster online advertising platform Azullo
December 2011 Liverpool computer games publisher Ripstone (formerly Rebel Play)
December 2011 Liverpool web solutions firm Hammerkit
March 2012 Wigan online lifestyle magazine Female First (First Active Media)
March 2012 Liverpool student guide publisher Survival Media
April 2012 Liverpool computer games publisher Setgo
April 2012 Liverpool music publishing firm Sentric Music
June 2012 Liverpool payment processing software firm Adaptis
June 2012 Cheshire scientific, medical and technical publisher Texere
July 2012 Burnley nursery management software firm Connect Technology
August 2012 Warrington visual effects firm Carbon Digital
December 2012 Liverpool e-health platform Med ePad
February 2013 Macclesfield product-visualisation platform Gateway 3D
One of the above companies, Carbon Digital, has, post investment, subsequently relocated its operational base from Warrington to Salford Quays.
AXM told Prolific North that: “We have made a range of investments – by stage from start-up to established and profitable businesses, from £50,000 proof of concept investments to over half a million of venture capital and including a large number of follow-on investments to actively support our portfolio.
“The fund has no favourite sub-sectors within the digital and creative sector and our range of investments proves that we will look at all opportunities; we are looking to build a diverse portfolio and are prepared to back companies from across the industry. This includes not just businesses with IPR or highly scalable platforms, for example, but also creative and digital agencies, marketing and advertising agencies and people-based businesses generally.
“The level of quality enquiries has been strong since the fund’s launch and gives us confidence for achieving the fund’s objectives.”