Maven Talks To Local Investee Ipac Packaging Innovations About Raising Finance To Grow Your Business In The North East

Maven caught up with Gateshead-based thermoformed packaging manufacturer, iPac Packaging Innovations, who secured funding via the North East Development Capital Fund (NEDCF) earlier this year, to enable the company to invest in its state-of-the-art facility to deliver on its ambitious expansion plans.

iPac has achieved impressive growth since beginning production two years ago, quickly establishing the business as a key player and innovator in its industry. But how does an entrepreneurial, high-growth business such as iPac secure development capital funding? How do you find the right funding partner or decide if you should grow organically? In Maven’s latest guest blog, investee Jonny Catto, Operations and Finance Director at iPac, talks through the company’s funding journey with Maven and how the finance has impacted the business and how it can help to achieve iPac’s long term goals.

Please can you tell us a little bit about yourself – what does your business do and what’s your role?

I’m Jonny Catto, Operations and Finance Director at iPac packaging innovations. Having spent 8 years in Audit and Corporate Finance at Deloitte, London, I returned to the North East to set the company up with my business partner (and Father-in-Law), Harry Reed, and we have now been trading for 2 and a half years. iPac makes thermoformed trays primarily for food packaging applications. Our trays are 100% recyclable and generally contain around 90% recycled material; and all of our trays are designed to provide functional; environmental; and cost improvement for our customers.

How did your search for funding lead you to Maven and what attracted you to Maven as a funding partner?

We were introduced to Maven through our accountants, UNW. As a start-up manufacturing business on a rapid growth trajectory, one of the key challenges is funding both fixed capital and working capital investments that are required to underpin growth and meet customer demands. The funding package that Maven was able to provide was tailored to our specific needs and structured to reflect the start-up/scale-up stage of our business in the shortterm – whilst also building in some flexible options in the longer term. This made the package ideal for our stage of growth.

How has the investment impacted your business?

Our year on year growth from 2018 to 2019 has seen revenues double. The investment provided by Maven has supported both the capital assets required to generate this revenue growth, as well as the working capital required to de-risk it and ensure that the growth is well controlled and managed.

What would you say to a business that is put off by taking on investment and would prefer to grow their business organically?

It depends on specific circumstances, but if the demand for your product or service is there today, why pass up the opportunity to exploit it? If demand is not your main obstacle to growth, then that probably means you are doing a fantastic job in providing a product or service that your customers (or potential customers) want. However, exploiting rapidly increasing demand does of course carry risk – so, finding the right ways to balance and manage that risk is the key to unlocking the real growth potential of a scale-up business. For us, that is where Maven came in.

What do you think are the main obstacles to accessing finance to grow that businesses face today?

For a start-up business like us, the key challenge in accessing finance is ongoing risk aversity in a post financial crisis landscape. Luckily our key finance partners in the very early days saw the potential in our business plan and management team, and have supported us throughout, and since being introduced to Maven last year, they have done the same.

What are the long-term goals for your business, and how will the funding you secured through Maven help you to achieve them?

Maven’s investment was key in achieving our Year 1-3 business plan, in which we have established ourselves as significant newcomer to our market. Our plan is to continue our extremely strong growth trajectory, continuing to support our current customers’ needs (expanding existing business), and building new customer relationships. We are currently expanding our site and production facilities, with our next phase of expansion due to complete in Q1 2020, we will continue to expand production capabilities further over the medium-to-long term.

NEDCF can invest up to £2 million to support established businesses via debt finance, mezzanine loans or equity investment to help fulfil their growth potential. If your business is in need of finance to help unlock its growth potential, Maven may be able to help.