Sapphire HR nets funding for expansion push

A North East HR firm has secured fresh investment to fund an acquisition and accelerate its national expansion.

Sapphire HR, based in Newcastle, has received a second six-figure investment from NPIF II – NEL Smaller Loans, managed by NEL Fund Managers, to complete the acquisition of Manchester-based Heads HR Limited.

The deal marks a key step in the company’s growth strategy, strengthening its presence in the education sector and opening up opportunities across primary care, social care and the NHS.

Founded to support small business owners with HR management, Sapphire HR has expanded its team and client base since its initial funding round in December 2024.

Bosses say the latest investment will also support the firm’s marketing strategy as it targets new sectors and enhances its brand positioning.

Michael Dobson, founder and managing director at Sapphire HR, said: “I’m delighted to have worked with the teams at NEL Fund Managers, Clive Owen and Swinburne Maddison on this funding round. 

“The unfailing support and guidance throughout the process have been invaluable, enabling us to realise our growth ambitions, and expand by acquiring another specialist team to provide HR Services to the education sector and schools across the country from this team’s base in Manchester.

“The team at Heads HR have built a loyal client base over the last ten-plus years and we look forward to working closely with the team over the coming months as the business moves forward with this exciting new chapter. 

“This acquisition positions us to capitalise on the significant opportunities ahead as we continue to strengthen as a business and deliver HR solutions to a UK-wide client-base.”

The transaction was introduced by Michael Cantwell, corporate finance partner at Clive Owen LLP, who oversaw the deal alongside Craig Malarkey, partner at Swinburne Maddison LLP.

They were supported by Joe Vera-Sanso, corporate finance executive at Clive Owen LLP; Sophie Ayre, corporate associate solicitor at Swinburne Maddison LLP; and Susan Snowdon, investment executive at NEL Fund Managers.

Craig added: “We were pleased to support Sapphire HR on this second NPIF II investment and the acquisition of Heads HR. 

“It’s a strong endorsement of the business’s strategy and growth ambitions and positions the team well for their next phase of expansion. 

“It’s been a pleasure working with Michael and the wider advisers, and we wish him and the Sapphire HR team every success going forward.”

Joe added: “As a longstanding client of Clive Owen LLP, we were delighted to support Michael in delivering this latest acquisition as part of Sapphire HR’s growth journey. 

“It was an exciting transaction to be involved in, and its success was due to collaborating closely with fellow advisers and the expertise of all the professionals involved. 

“The successful acquisition of Heads HR positions Sapphire strongly for continued growth and expansion, and we wish Michael and his team every success.”

Susan added: “As a previous investee, I was delighted to work with Michael and the team again and continue our strategic partnership. 

“With this new investment, the business is well positioned to drive sustainable revenue growth, and I wish them all the best.”

The £660 million Northern Powerhouse Investment Fund II (NPIF II) fund, operated by British Business Bank, provides loans from £25,000 to £2 million and equity investment up to £5 million to help small and medium-sized businesses.

Sarah Newbould, senior investment manager at the British Business Bank, added: “Having initially supported Sapphire HR at the end of 2024, we’re proud to see NEL providing further funding to this ambitious business through NPIF II. NPIF II is committed to backing businesses throughout their growth journey, allowing them to pursue new opportunities. 

“It’s investments like this that can help to broaden a business’s reach, unlock new markets, create high-quality jobs and, ultimately, build a stronger Northern economy.”

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