The Ignite growth accelerator has announced plans to roll out its programme to Manchester and London.
The team behind the North East-grown pre-seed accelerator format hopes to raise £1.8m to operate six programmes, including at its Newcastle base and counterparts at yet to be confirmed venues in Manchester and London.
Like the existing three-month Ignite100 programme, the new additions will offer investment in turn for an equity stake, as well as incubator space, coaching, mentoring and networking opportunities for first-time entrepreneurs developing businesses in the web and mobile sector.
Chief executive officer Paul Smith said Ignite aims to establish a permanent London base with full-time staff, which will operate beyond the three month programme that launches in January. The Manchester instalment is scheduled to start in April 2016 and Newcastle in September this year. Ten teams will take part in each.
Previous Ignite teams have typically received £18,000 of initial investment in return for 8% equity in the company — and a similar arrangement is anticipated for the new programmes.
Teams will receive support from Ignite’s partners, including the likes of Softlayer, Sendgrid, Twilio and Sage.
Mr Smith explained: “We’re really the only programme that targets early stage start-ups in the UK, and our work supporting businesses outside of Newcastle has shown there’s a need for what we do.
“Also, we’re a business ourselves and we have a responsibility to expand and better ourselves in this way.”
A third of the new investment round has already been raised from existing investors, including Friends Reunited founder Steve Pankhurst, angel investor Doug Scott, former Barclays Wealth MD Simon Bichara, Manchester-based entrepreneur Laurence Marlor and Newcastle-based Northstar Ventures.
Investors can choose which of the three programmes to invest in. They receive equity in every team that joins a programme, as well the option to participate in team selection and mentoring, plus preferential investment rights when a team raises further capital.
Mr Smith added: “As well as supporting Newcastle’s nationally renowned tech hub, Ignite has been working with startups in both London and Manchester for several years. Unfortunately, there’s a still lack in quality coaching and support for early-stage tech teams in both cities.
“In London, there hasn’t been a quality programme for pre-seed teams since Springboard merged with Techstars, which rarely considers first-time entrepreneurs — that’s a key motivation for our expansion to the capital.
“Ignite is one of the few programmes in the UK with a demonstrable track record in leading businesses to success and creating value for investors. For example, our 2013 cohort now has a collective valuation of over £35m, an 8x increase in value for our angel investors in just 18 months.”
Steve Pankhurst, founder of Friends Reunited and angel investor in Ignite said: “I invested in Ignite a year ago and it’s not just opened my eyes to a new way of angel investing, but it’s been fun. The start-ups are solid teams that you get to know well through mentoring over the course of the year, meaning you can make an informed decision on whether to invest more.
“Ignite’s team is a breath of fresh air in a tech scene that is often full of hot air.”