NStar, the new technology finance company set up by the Regional Development Agency for the North East of England, has applied for and won £23m of funding from the European Regional Development Fund. Total funds available for the region have reached £33m thanks to a £10m fund raised by One NorthEast and the European Regional Development Fund.
The £10m fund is called the Proof of Concept Fund, and as its name suggests will target sub £1m investments primarily involved in proving the commercial viability of early stage technology, such as things like technology transfer from universities. Such a fund is already up and being run by NStar. It has a pilot fund of £500,000 and the work it begins will be followed by the £10m Proof of Concept Fund, when that it up and running. The pilot fund is being run by NStar’s existing management team. NStar was set up in April 2003.
The second fund of £23m will be called the North East Co-investment Fund. It will target later stage deals and those with a funding requirement up to £2m. However, this fund will only commit to investments where it is a partner alongside the private sector.
NStar currently has the fund management contracts for both the £10m Proof of Concept Fund and the £23m North East Co-investment Fund out to tender, as is required in European government funded situations.
Both funds, once operational, will need to strike a balance between commercial returns and achieving their strategic objective of promoting business and jobs in the North East of England.