21 June 2023 – WorkBuzz, a fast-growing employee engagement platform which is headquartered in Milton Keynes, has secured a £6.2m funding round led by YFM Equity Partners (YFM) and including existing investors Mercia and Foresight Group (Foresight), which were both investing from the Midlands Engine Investment Fund (MEIF).

The funding will enable WorkBuzz to pursue international expansion, enhance sales and marketing, and deliver new tech innovations to its growing roster of clients.

WorkBuzz provides businesses with an agile employee engagement platform, backed by expert consultancy, which helps forward-thinking organisations gather real-time feedback from their people, analyses this in real-time using AI, and guides managers on where to focus in order to build great cultures and improve employee retention. 

Launched in 2018 by employee engagement expert Steven Frost, WorkBuzz has almost doubled in size in each of the last two years and currently serves over 400 organisations including Five Guys, Shell Energy and HS2.

With generational talent shortages, hybrid-working, and changing employee expectations, improving employee engagement is a top priority for most organisations, with recent research conducted by WorkBuzz indicating that 74% of companies surveyed are now tracking this metric.

Steven Frost, WorkBuzz CEO, said: “We’re proud of what we’ve achieved so far and are very grateful for the support of our clients and partners, but it feels like we’re just getting started.  This latest round of investment will be transformative – it’s 180% more than in our entire history to date. We’re excited to scale up our investments in our platform and new innovations, co-creating these with our clients, as well as expand into the US.  With generational talent shortages and disruptive technologies like generative AI, there’s never been a more exciting time to build an HR tech company and make an impact.”

Adam Hart, Investment Director YFM added: “WorkBuzz is going through a really exciting period of growth and has the ambition and drive to significantly expand upon this. They have been able to attract big name clients thanks to a combination of leading-edge software and clear domain expertise in the employee engagement space. As growing numbers of organisations seek to forge stronger connections with employees in a complex environment, WorkBuzz has the potential to make a huge impact in this market.”

This is the third funding round backed by Mercia and Foresight, which have supported the company since 2021 using funding from MEIF.

Keira Shepperson, Director, Regional Funding at the British Business Bank, said: “The Midlands Engine Investment Fund invested in WorkBuzz in 2022 and helped to create new jobs in the region, supporting the company’s increase in annual revenue and growth. This follow-on funding will be utilised by the company to further its growth and venture out into international markets.

“The MEIF invests in innovative and growth focused companies in the Midlands region and its continued support of WorkBuzz shows the MEIF’s commitment to backing high growth potential SMEs in the region.”     

The YFM team included Adam Hart, Zach Francis and Jamie Roberts.

The funding was secured from YFM Managed, British Smaller Companies VCT and British Smaller Companies VCT2.

The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank

Advisers on the deal included: RPL; Commercial DD, Shoosmiths, Legal, Leckie Kershaw, Tech DD, Human Factor Health Check, Organisational DD, Graeme Scott, Financial DD and Philip Hare & Associates LLP, Philip Hare, VCT advice. Chris Roberts at CRA facilitated the introduction.

-ENDS-

About YFM

YFM invests £2m to £10m into businesses with strong growth potential located across the UK through a regional network of offices in London, Leeds, Manchester, Reading and Birmingham. YFM Equity Partners are specialist, independently owned, private equity investors. Having recently celebrated 40 years of investing experience, our portfolio may have changed over the years, but our ethos has remained the same – to support small businesses across the UK in their next phase of growth. We seek to unlock value and growth potential by providing up to £10 million of equity to fuel the development of established business throughout the UK regions. We do this by helping our portfolio companies launch new initiatives, make transformative acquisitions, and upgrade technologies and systems. We are dedicated to working alongside management teams to create long-term value for our investors, the companies we invest in, and make a positive economic impact for the communities in which we work. We manage funds in excess of £420 million which include venture capital trusts and private equity funds. YFM Equity Partners conducts its investment business through its subsidiary YFM Private Equity Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 122120).

For more information, please visit www.yfmep.com

About Foresight Group (“Foresight”):

Foresight Group was founded in 1984 and is a leading listed infrastructure and private equity investment manager. With a long-established focus on ESG and sustainability-led strategies, it aims to provide attractive returns to its institutional and private investors from hard-to-access private markets. Foresight manages over 350 infrastructure assets with a focus on solar and onshore wind assets, bioenergy and waste, as well as renewable energy enabling projects, energy efficiency management solutions, social and core infrastructure projects and sustainable forestry assets. Its private equity team manages eleven regionally focused investment funds across the UK and an SME impact fund supporting Irish SMEs. This team reviews over 2,500 business plans each year and currently supports more than 250 investments in SMEs. Foresight Capital Management manages four strategies across six investment vehicles with an AUM of £1.4 billion.

Foresight operates across seven countries in Europe and Australia with AUM of £12.2 billion*. Foresight Group Holdings Limited listed on the Main Market of the London Stock Exchange in February 2021. https://www.foresightgroup.eu/shareholders

*Note: Based on Foresight Group unaudited AUM as at 31 March 2023.

About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of balance sheet, venture, private equity and debt capital: the Group’s ‘Complete Connected Capital’. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK footprint through its regional offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia currently has c.£1.4 billion of assets under management and, since its IPO in December 2014, has invested c.£111million gross into its direct investment portfolio.

The Group raises its own Enterprise Investment Scheme (EIS) Funds and manages Venture Capital Trusts (VCTs) details about open offers can be found through Mercia’s website.

Mercia Asset Management PLC is quoted on AIM with the epic “MERC” and includes the following wholly owned subsidiaries –

●       Mercia Fund Management Limited is authorised and regulated by the FCA under firm reference number 524856

●       Enterprise Ventures Limited is authorised and regulated by the FCA under firm reference number 183363

●       EV Business Loans Limited is authorised and regulated by the FCA under firm reference number 443560

www.mercia.co.uk

About the Midlands Engine Investment Fund (MEIF)

The Midlands Engine Investment Fund, supported by the European Regional Development Fund, will invest in Debt Finance, Small Business Loans, Proof-of-Concept and Equity Finance funds, ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.

The Midlands Engine Investment Fund is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.

The Midlands Engine Investment Fund is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.

The MEIF covers the following LEP areas: Black Country, Coventry & Warwickshire, Greater Birmingham & Solihull, Stoke-on-Trent and Staffordshire, The Marches, and Worcestershire in the West Midlands; and Derby, Derbyshire, Nottingham & Nottinghamshire (D2N2) Greater Lincolnshire, Leicester and Leicestershire, and South-East Midlands in the East and South-East Midlands.

The project is receiving up to £78,550,000 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The programme will continue to spend to the end of 2023.

The Department for Levelling Up,  Housing and Communities is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit www.gov.uk/european-growth-funding. The European Investment Bank is providing £122,500,000 to support the Midlands Engine Investment Fund. This follows backing for the Northern Powerhouse in 2017 and backing for the newly launched North East Fund. For further information visit www.eib.org

The funds in which Midlands Engine Investment Fund invests are open to businesses with material operations in or planning to open material operations in the West Midlands and East & South-East Midlands.

The British Business Bank has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). The guide, which impartially sets out the range finance options available to businesses and provides links to support available at a regional level, is available at 

https://thebusinessfinanceguide.co.uk

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support nearly £8bn[1] of finance to almost 94,800 smaller businesses[2]. Since March 2020, the British Business Bank has also launched four new Coronavirus business loan schemes, delivering almost £73bn of finance to around 1.6m businesses.

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

In light of the coronavirus pandemic and EU Exit, the Finance Hub has expanded and it now targets a wider business audience. It continues to provide information and support for scale-up, high growth and potential high growth businesses, but now provides increased content, information and products for businesses in survival and recovery mindsets. The Finance Hub has been redesigned and repositioned to reflect this, during this period of economic uncertainty.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at www.british-business-bank.co.uk.