A service which puts promising businesses in touch with experienced investors who can help them grow has unlocked millions in investment for firms driving a new wave of technologies.
GC Angels, a part of the Growth Company, was set up by Greater Manchester Combined Authority to help plug a gap in the market for funding tech businesses across the region who want to grow by raising seed rounds of funding.
It has helped secure capital for a number of early stage businesses across Greater Manchester’s 10 local authorities.
And its success in highlighting the numbers of local tech start-ups with real potential has encouraged other investors to look outside London and set up in the North West.
GC Angels, which has a presence in Accelerate Places on Princess Street, launched a co-investment service in 2018 with the aim of investing £2m of Local Growth Fund capital to help kick-start the market for investment into early stage businesses.
So far, it has done 12 investment deals, joining forces with other funders to help support the growth of digital businesses operating in fields such as education, training and health – areas identified by Innovate UK as critical sectors for research and development.
Jessica Jackson, GC Angel’s Investment Director, explained: “We were set up to respond to a gap in the market for funding early stage businesses looking for their initial ‘seed’ round of investment right through to what’s known as Series A funding. We support them with their initial raise, unlocking additional funding further down the line.
“The early stage funding gap is noticeably worse outside London, and we have moved on from providing advice about how to overcome that hurdle, to actually providing early stage funding ourselves and acting as a cornerstone investor in our own right.”
GC Angels’ remit is to focus on supporting businesses in digital, creative and tech, and it is backing the development of immersive technologies in particular – using digital technologies like virtual reality, augmented reality and haptics to provide products and services which give customers or users a deeper and more impactful experience.
This could range from online learning, to virtual tools which help surgeons practice operating theatre technical skills.
GC Angels recent investments include Bolton-based Near-Life, which has developed cutting-edge interactive video learning technology used by clients who range from supermarkets to humanitarian aid organisations and the North West Ambulance Service NHS Trust.
It has also invested in TootToot in Manchester, which has developed a safeguarding app which enables students to voice feelings about issues like bullying and mental health in a discrete and confidential way.
Jess added: “There is a real sense that a new wave of technology-driven start-ups are emerging in and around Manchester, or even moving here to take advantage of what it has to offer in terms of both early stage support – whether that is financial or otherwise – and tech talent.
“We see that not just where we’re based at Accelerate Places – which is itself a hub for digital tech firms – but across the whole region. This isn’t just a city phenomenon.
“That momentum is also attracting investors to Manchester and the North West. They can see an increasing number of opportunities here and the potential for better investment returns than they might get in London, where we have seen some inflated business values.
“What’s been particularly pleasing for us is that these businesses also cross gender and ethnic divides. These technologies are providing opportunities for all, and we’re seeing both women and BaME entrepreneurs come up with great ideas for transformational businesses.”
Though GC Angels and its partners have already made a dozen investments in the space of 15 months, Jess says she is keen to hear of further opportunities to back North West businesses.
She said: “What we look for is clear evidence that your business is investment-ready – facts, figures and presentations which tell your story and demonstrate the business potential. Those aren’t skills that come easily and we can refer people to the Business Growth Hub for help if it is needed.
“We want to know what problem your business solves and why yours is the best solution. But we also need to know how that is going to translate into revenue. We don’t necessarily need to see a fully-working product but we do need to know how it will work.”
Georgia-Kaye Berry, who manages Accelerate Places Manchester, added: “We know from the businesses based here on Princess Street that the ideas and the ambitions to exploit digital potential are already well-established in the North West.
“The missing link has been funding and support which helps turn those ideas into real business potential and GC Angels’ work is going a long way to help plug that gap, both through its own investments and by attracting other funders into the region.”
