Mercia Asset Management, a leading capital provider to SMEs in the UK, has reported a 24% increase in its investments during the first half of 2023 compared to the same period last year. In the six months leading up to June, Mercia completed 132 investments worth £94.6m, up from 97 investments worth £76m last year. As part of its mission to address the funding gap in the regions, approximately 85% of the investment value went to firms outside of London. These figures include debt funding from Frontier Development Capital, which Mercia acquired in 2022.
Among the key investments made by Mercia during this period were Sitehop, a Sheffield-based company with an innovative encryption solution for telecoms and data networks; Zedify, the UK’s largest electric bike parcel delivery network; CanSense, a Swansea-based company developing a blood test for early-stage bowel cancer diagnosis; Medherant, a University of Warwick spin-out working on the world’s first testosterone patch for post-menopausal women; Invincibles Studio, the creator of the popular football game Soccer Manager; and Glider, a PropTech firm based in Clitheroe.
Mercia typically invests between £500,000 and £10m, with more than half of its funding allocated to venture capital for early-stage and growth businesses. The remaining funding is primarily provided in the form of various types of loan finance.
In addition to its direct investments, Mercia manages a range of third-party funds, including parts of the Northern Powerhouse Investment Fund, Midlands Engine Investment Fund, and North East Venture Fund. The company also raises its own funds and invests from its own balance sheet. It aims to expand its funds under management to meet the increasing demand, particularly from regional businesses.
During the same period, Mercia achieved successful exits from several investments. SockMonkey Studios, a games developer based in Middlesbrough, was sold to Behaviour Interactive of Canada; Horsefly Analytics, an HR Tech firm in Knowsley, was acquired by LDC; and ParkVia, a parking reservation platform from Manchester, was sold to CAVU, part of Manchester Airports Group plc. Additional acquisitions included Texere Publishing, a scientific publisher from Knutsford, which was acquired by US company BroadcastMed, and Intechnica, a tech consultancy from Manchester, acquired by Crosslake Technologies.
Dr Mark Payton, CEO of Mercia, expressed the company’s commitment to supporting new and growing businesses, stating, “Our track record of successful exits shows that our approach not only helps to nurture rising stars but also achieves returns for investors.” He also highlighted Mercia’s role in bridging funding gaps across the UK and its ability to identify winning investments throughout the country.
With a focus on diversity, equity, and inclusion, Mercia aims to engage with communities that have limited access to capital providers and contribute to changing this landscape. The company looks forward to creating more success stories in the second half of the year and beyond.
