Member Article

Northstar celebrates milestone proof of concept investment

Venture capital company Northstar Ventures is celebrating investing Proof of Concept (POC) funding into its 300th ambitious North East business.

Designed to provide early stage capital for businesses with high growth potential, POC funding allows enterprises to trial potentially ground-breaking new concepts that will help the regional economy grow.

Since it was set up in 2004, Northstar has invested over £13m in just over 200 ambitious young enterprises through its initial POC Fund, £30m via the North East Co-Investment Fund and £2.4m through the North East Creative Content Fund. It is currently investing in the regional success stories of the future from two funds – the £25m FBNE Accelerator Fund and £15m FBNE Proof of Concept Fund, funding almost 100 companies from this POC fund to date.

Investments from Northstar’s POC funds have helped to put a number of high growth regional businesses on the map.

Newcastle drug discovery and development firm e-Therapeutics, received £90,000 from the initial POC fund and £250,000 of Co-Investment funding as part of more than £50m raised towards its pioneering approach to the discovery of new medicines. The business, which also has a base in Oxford and listed on the Alternative Investment Market in 2007, employs 21 people.

An investment of £60,000 from Northstar’s POC fund and £1.5m of Accelerator funding was part of £9m-plus raised by Gateshead video games company Eutechnyx to expand the business and create jobs. The international success story has 120 North East staff and specialises in creating driving games. Recent titles include the PC game NASCAR The Game: 2013, and Auto Club Revolution which delivers a console quality online racing game to the free-to-play market while creating a social platform for communities of car enthusiasts and racing fans.

Applied Superconductor, based in Blyth, received £60,000 of POC funds and £500,000 Co-Investment money as part of a £4m investment in technology to improve the efficiency and performance of electricity distribution networks. The company, which employs 21 people, is poised to play a major role in the global green energy industry, facilitating the smooth connection of green energy producers, such as wind turbines, into the existing grid system.

Northstar has helped North Shields software as a service (SaaS) business Kykloud achieve rapid growth and establish itself as a market leader in its field with funding through its POC and Accelerator funds totalling £900,000. Kykloud, which has developed a cloud based mobile surveying and asset management tool for building surveyors and facilities managers, is now being used on property portfolios around the globe by a wide range of industry sectors. Five of the top 10 building surveying companies in the UK and many leading PLC businesses now use Kykloud to carry out condition assessments and manage their assets more effectively.

Northstar Director Ian Richards said: “The success of these four companies, and hundreds of others in the region, shows the dividends that Proof of Concept funding plays when it is invested in the right businesses at the right time.

“We are the leading provider of early stage POC funding in the North East. These successful businesses wouldn’t have existed without us.

“Local decision making is key to making POC funding work. We have real experience in this area and it’s amazing what can be achieved through this type of funding.”

Northstar’s success in identifying future success stories is largely due to the skills of its North East team of 14 investment professionals, who have a diverse background and a strong knowledge of different industries. The team is embedded into regional networks and has good links into national and international networks.

The team is keen to hear from ambitious entrepreneurs who could use capital from its two investing funds to turn their ideas or business into high earners for the North East. The Proof of Concept Fund and the Accelerator Fund are part of the £125m Finance for Business North East programme, backed by the European Investment Bank and European Regional Development Fund.

This was posted in Bdaily's Members' News section by Northstar Ventures .