New £20m seed fund to offer investments to early-stage businesses across Liverpool city region. Tony McDonough reports
Early-stage businesses across Liverpool city region will get access to a £20m seed fund.
Metro Mayor Steve Rotheram says the Combined Authority will put £10m into the fund with another £5m coming from Merseyside Special Investment Fund (MSIF). A fund manager will be appointed to raise the additional capital.
It is designed to improve the success rate of start-up companies with high growth potential. The fund aims to help them grow sustainably with an alternative to grant and debt finance.
This fund would also help to attract inward investment into the city region and improve the range of business support available.
Mr Rotheram said: “Small businesses are the backbone of our economy – accounting for 99% of all businesses in the region. They’re essential, not only to our current success, but to our long-term prosperity.
“But despite lots of businesses starting-up in our region, we need to help them to scale up and thrive.
“Over the last few years, we’ve delivered an unprecedented £200m package of support to help our business community survive and recover through the pandemic. Since I was elected Mayor, I’ve been working to establish our area as an innovation engine.
“This latest funding is the next step on that journey. I want this £20m fund to be a catalyst for businesses in the region to kick on and succeed – creating more jobs for local people.”
Available to businesses across all sectors, the fund is designed to help the city region reach its target of spending 5% of its economy on research and development (R&D) by 2030 – nearly double the national target.
A new limited partnership would be created to deliver the fund – with plans for new investment partners to join to ensure its long-term sustainability. Any return on capital could be reinvested or returned to the partners, similar to the existing MSIF model.
John O’Brien, chair of MSIF, added: “Although the city region has a long history of successful businesses, there is significant untapped potential and demand for seed finance.
“This new seed fund will be a game changer – providing equity and leveraging additional investment from outside the region to accelerate growth.”