THE first investment from the new £125m North East venture capital fund has been made into a regional company and there will be more in the coming weeks and months with more than 500 businesses now looking for support from the fund.
Ambitious Gateshead-based games development company Eutechnyx has received £650,000 from the Finance for Business North East Fund (FBNEF) which was launched in January.
This follows a £5.2m injection into Eutechnyx as reported in nebusiness last week by Dutch-based private equity firm Prime Technology Ventures, with the cash being used to create a new generation of free-to-play games which could see it double its North East workforce to 170.
The £125m fund has been set up to support the growth plans of 850 North East companies and create 5,000 new jobs over its five-year lifetime.
Fund manager Newcastle-based NorthStar Equity Investors (NSEI) made the investment in Eutechnyx on behalf of the (FBNEF) through its North East Accelerator Fund.
Alasdair Greig, investment manager of NSEI, said: “The North East Accelerator Fund was set up to help companies invest in their future growth at an early stage in their development.
“This investment in Eutechnyx, an exciting growth company and good demonstration of the digital media skills in the North East, is the perfect example of what the fund is all about, and as such, a fitting inaugural investment.” Brian Jobling, CEO of Eutechnyx, said: “We are thrilled to have secured this investment. As an independent developer, this injection will help us to continue to forge our own destiny within a rapidly changing games industry.
“Not only does the investment enable us to continue to innovate, we can continue to do so on our own terms. The Finance for Business North East Fund support means a lot to companies like Eutechnyx and to start-ups all over the North East.”
Andrew Mitchell, chief executive of North East Finance, which oversees investments from FBNEF, said: “We’re delighted to see the first investment successfully completed. The volume and quality of funding applications so far has been very high and we anticipate more deals following on from the other funds very soon.”
FBNEF has been created with £62.5m from the European Investment Bank, £44.25m from the European Regional Development Fund 2007-2013 and £18.25m from regional development agency One North East. Malcolm Page, One North East deputy chief executive, said: “It is the first of what will be hundreds of investments into exciting growing North East companies which will underpin the regional economy as we enter renewed economic growth.”
The £125m super-fund is aimed at helping SME’s and start-ups across all business sectors with its six individual component funds tailored for more specific investment needs.
Jose Palma Andres, European Commission director for ERDF operations in the UK, said: “We are confident that this investment will be the first of many – paving the way for the success of the various funds and a sustainable basis for future risk capital operations in North East England.”
Simon Brooks, European Investment Bank vice president responsible for the UK, said: “The European Investment Bank congratulates Eutechnyx on being the first recipient of funding from the £125m Finance for Business North East Fund.”
Source: The Journal 17/05/2010
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