£2.5m funding for Sheffield's Magnomatics

Sheffield-based technology firm, Magnomatics Limited, has secured £2.5m funding from Finance Yorkshire to develop products and create new jobs.

The deal includes a £1.1m equity linked investment and matched co-investment from new investor IP Group plc, together with funding from existing investor, Fusion IP.

Chris Kirby, CEO, said: “We were coming out of our proof of concept phase and through significant customer engagement had demonstrated benefits to multiple markets.

“We needed finance to further production engineer our innovative products to demonstrate their robustness and suitability for series manufacture. Our goal was to create a platform of unique cost-effective electro-mechanical products which would be applicable to the global markets we had identified, with an initial focus on hybrid electric vehicles in the automotive and marine sectors.

“After six years of consistently delivering technology assessment projects for our customers, we had reached a stage where, to develop further, we required external funding to enable us to grow our engineering team and mature our products so that we could win larger contracts.

“We approached Finance Yorkshire because we were aware they were interested in supporting companies like ours, involved in green, high technology. We believed our expansion plans fitted their remit for potential investment.”

Established in 2006 as a spin-out company from the University of Sheffield, Magnomatics Limited has a range of patented products, including high efficiency, ultra compact motors and generators, as well as magnetic transmission systems.

The funding round has helped the firm to more than double its workforce and advance its products.

Chris added: “The funding meant we could take our proven technology and prepare for production - driving down costs, demonstrating robustness and engaging with our customers at a more advanced level.”

Business development manager, David Latimer, said: “We are already working in Japan and the US as well as Europe but want to grow our global customer base further.

“We aim to become a major Sheffield company that helps bring the region’s strengths in engineering design and advanced manufacturing to the world stage.”

Andrew Burton, Finance Yorkshire investment director, said: “We have great faith in Magnomatics’ products and its people. Chris is a chartered engineer who has previous experience of forming – and successfully selling – a spin-out company and David Latimer brings with him a wealth of know-how and skills from his previous CEO roles at companies of all sizes.

“This is a substantial co-investment which has led to the creation of a number of high level new jobs and will hopefully help take the company to an ever-increasing global customer base.”

Finance Yorkshire provides seedcorn, loan and equity linked investments, ranging from £15,000 to £2m to help a range of small and medium sized businesses to meet their funding requirements for growth and development.

The project is supported financially by the European Union. It has attracted £30m investment from the European Regional Development Fund (ERDF) as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme, £15m from Yorkshire Forward’s Single Programme, and £45m match funding from the European Investment Bank.