A transatlantic venture capital fund has announced its plans to inject £80 million into UK businesses, potentially earmarking £50 million for regional investments.
This move signifies a significant boost for companies outside the capital, highlighting the growing appeal of regional markets in the venture capital landscape.
Investment Plans in the Regions
Marc Shirman, investment director at the firm, revealed that a £9 million investment round in Manchester-based FinTech AccessPay is indicative of future deals. He stated, “In the regions there are some really strong opportunities to take companies either straight to the US market or, via London, into Europe and then the US.” The firm aims to deploy substantial growth investment over the next two to three years by executing more AccessPay-style deals.
Proposed Allocation of Funds
Shirman mentioned that the firm might allocate approximately 50% of its available UK funds to regional businesses, with the remaining 50% directed towards London-based companies. This allocation will depend on the opportunities that emerge. The goal is to support strong teams with scalable propositions, evaluating around 1,100 opportunities annually and funding between five to ten projects.
Adding Value and Commitment to Regions
By maintaining a presence in the regions, the firm demonstrates its commitment to northern companies. Shirman emphasised the importance of face-to-face interactions over remote communications, comparing long-distance relationships unfavourably to being present on the ground. The firm intends to establish a permanent presence and be accessible to decision-makers in their portfolio companies.
Focus on FinTech and Software
Shirman has a particular interest in FinTech, aiming to push forward innovative start-ups and scale-ups that serve the financial services landscape. He noted that while London remains a financial hub, many FinTech companies in the regions are focusing on automating back-office processes and improving front-office efficiency. Manchester, for example, hosts significant back-office operations that present substantial opportunities for technological enhancements.
Support for Northern Offices
The firm’s strategy includes helping companies expand into new markets, aligning with the borderless nature of software enterprises. This approach benefits companies such as AccessPay and ResponseTap, which already have a base in the US.
Opportunities in Financial Technology
As London is well-known for its front-office financial services, the regions are becoming increasingly important for back-office functions. This division of roles presents a unique opportunity for regional FinTech companies to innovate and provide essential services.
Shirman’s Commitment
By choosing to base himself in Manchester, Shirman underscores the importance of being closely involved with the regional business community, facilitating better decision-making and support for local companies.
The transatlantic venture capital fund’s plan to invest £50 million in UK regions marks a significant commitment to regional development. With a strategic focus on FinTech and software, the firm aims to drive growth and innovation across the UK.
This investment strategy not only supports the regional economies but also positions these areas as crucial hubs in the venture capital landscape.