West Midlands Combined Authority launches £25m SME fund

West Midlands Co-investment fund Image credit: West Midlands Combined Authority

West Midlands Combined Authority and West Midlands Pension Fund have launched a £25m fund to invest in high-growth SMEs in the region.

The West Midlands Co-investment fund will provide capital to small businesses working in areas such as green technology, advanced manufacturing, life sciences, creative and digital.

Private investors will match the £25m on a “deal-by-deal basis”, which means the total funding pool could be as high as £50m.

“SMEs are the lifeblood of our local economy so it’s vital that we improve their access to the finance they need to advance,” said Andy Street, Mayor of the West Midlands. “These are exactly the sort of businesses that will help power our regional recovery and future prospects.”

Street added: “We were the fastest growing region outside London in the decade leading up to the pandemic and we remain a hotbed of some of best companies and brightest minds.”

Future Planet Capital’s Midven will manage the fund to issue equity investments of up to £1m to SMEs over 10 years.

It is the latest technology push for the West Midlands, which recently appointed Martin Ward as the region’s first tech commissioner.

Cllr Milkinder Jaspal, chair of the WMPF Pensions Committee, said: “It will enable businesses where our members work and live to maximise their potential alongside generating growth to meet future pension benefits.

Jaspal added: “It will support the technological advances we need to transition to net zero and attract further investment into opportunities for driving positive change through innovation.”

The West Midlands tech sector last year hit a valuation of £15bn. Companies located in the West Midlands include Energym, Nourish3d and Onto. Others are relocating to the region, with delivery company Zedify announcing this month it is moving its headquarters from Cambridge to Birmingham.