Mayor reveals plan for new £20m fund to help local businesses grow and thrive

Mayor Steve Rotheram has announced plans for a new £20m seed fund to provide equity investment in early-stage businesses to fuel growth and create good quality jobs.

Under the proposal, the Combined Authority will invest £10m into an LCR Seed Fund in partnership with the Merseyside Special Investment Fund (MSIF), which will provide a further £5m. A fund manager will be appointed who will also lead on raising additional capital to increase the total fund to at least £20m.

The initiative, to be considered at November’s Combined Authority meeting, would see money invested in companies in return for equity.

Steve Rotheram, Mayor of the Liverpool City Region, said: “Small businesses are the backbone of our economy - accounting for 99 per cent 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 more 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 one of the most attractive, supportive environments to launch and grow a business in.

“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 and helping our economy to grow in the process.”

The Seed Fund is designed to improve the success rate of innovative start-up companies with high growth potential by helping them grow sustainably with an alternative to grant and debt finance.

The fund would also help to attract inward investment into the city region and improve the range of business support available. Available to businesses across all sectors, the fund is designed to help the city region reach its target of spending 5 per cent of its economy on research and development (R&D) by 2030 nearly double the national target.

John O’Brien, chair of MSIF, said: “Although the LCR has a long history of successful businesses, there is significant untapped potential and demand for seed finance. The new seed fund will be a game changer providing equity and leveraging additional investment from outside the region to accelerate growth.

“MSIF is delighted to invest alongside the Combined Authority; working together to create an environment where successful innovative businesses can thrive.”

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.

By Mark Adair – Correspondent, Bdaily

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