North East’s leading cocktail bar group celebrates a third investment from NEL Fund Managers

North East’s leading cocktail bar group celebrates a third investment from NEL Fund Managers

North East’s leading cocktail bar group Mother Mercy Hospitality Ltd received a strategic six-figure investment from NPIF II – NEL Debt Finance, which is managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II (NPIF II).

This marks the third NEL investment in the group and will be used to support a fifth cocktail bar in Durham opening on Saturday 13th June. This new venue follows openings in Newcastle’s Cloth Market, Fenwick, Grey Street and the most recent site in Heaton.

Mother Mercy has been ranked among the UK’s Top 50 Cocktail Bars twice in the last 3 years and the brand has earned a reputation for creative cocktails, skilled mixologists and a vibrant, welcoming atmosphere. The business is accredited as a ‘Great Place to Work’ and is set to continue its success and expansion with further presence across the North East.

Some of the investment will also be used to improve existing venues, increase capacity and further develop customer experience.

Founder and Managing Director Neil Donachie said: “NEL's support, including a third investment, has been crucial to our growth, especially given the hospitality sector's challenging access to finance for smaller, independent operators. NEL understood our business model and long-term goals, providing funding that enables us to open new venues, expand Mother Mercy's reach, and create more jobs and opportunities for our team.”

Since opening the Cloth Market basement bar in 2019, Mother Mercy has always been focused on premium quality drinks and an exceptional guest experience. The business has experienced operating high street, concession and neighbourhood bars in multiple locations, providing a strong platform from which to grow and scale.

This success is testament to the 34 team members the business continues to invest in and reflects the strength of NEL’s ‘more than capital’ approach and long-term support model, helping management teams navigate growth challenges, create value, and build long-term resilience.

Jane Siddle, Senior Investment Executive at NEL Fund Managers, shared: “It was fantastic to work alongside Mother Mercy’s accomplished management team on a subsequent investment

from NEL. As part of our existing portfolio, they truly demonstrate how strategic funding can create growth opportunities throughout a long-term partnership. I sincerely wish them continued success.”

Amy Wanless, Corporate Partner, and Declan Fahey, Corporate Solicitor at Square One Law, provided expert legal advice throughout. Declan Fahey commented: "This is a brilliant investment for us to have supported NEL Fund Managers with, which will bolster the hospitality sector in the North East and allow Mother Mercy to open their brand new Durham venue. We've got a brilliant nightlife economy in our region, so to support with Mother Mercy's strategic growth plan via NEL's fantastic NPIF II Fund has been a real pleasure. We're excited to see how the business goes from strength to strength and how the fund is being put to great use, creating new jobs and opportunities."

Operated by British Business Bank, the £660m Northern Powerhouse Investment Fund II covers the entire North and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.

Sarah Newbould, Senior Investment Manager at the British Business Bank said: “Through the Northern Powerhouse Investment Fund II, we are committed to providing access to finance for ambitious businesses across the North, supporting them to scale, create jobs and build long-term resilience.

Mother Mercy is a strong example of an established hospitality business using continued investment to grow sustainably across the North East. This latest NPIF II investment demonstrates the ongoing role of the Fund in backing established businesses, helping them to scale and contributing to long-term economic growth.”

The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

NEL Fund Managers are also managing NPIF II – NEL Smaller Loans which offers investments from £25,000 to £100,000 to new and growing businesses.

For more information about NEL, please visit www.nel.co.uk or contact the investment team on 0345 369 7007.