Press

Onyx Appear in the Financial Times

As appeared in the Financial Times - visit FT.com.

Onyx Group's Edinburgh data centre, which opened last Thursday, is tangible evidence of how regionally based venture capital can help growing businesses.

When Onyx has needed to raise money fast to clinch deals supporting its ambition to be a national IT provider, its relationship with Newcastle-based NorthStar Equity Investors has delivered the goods.

"I can grow this to a £50m business," says Neil Stephenson, chief executive of Teesside-based Onyx. "I have the energy, the enthusiasm, but I need quick access to cash at the appropriate time. NorthStar have been there when I've needed."

Founded in 1996 and the subject of a management buy-out in 2000, Onyx has risen from being one of the UK's first internet service providers to become a specialist in networks, hosting and business continuity, data security and managed networks, with particular focus on regulated markets. Other areas of focus include utilities, legal and accountancy firms and the National Health Service prescriptions arm.

Onyx's purchase last month of City-based IT business Moffat Communications, a hedge fund supplier, was its fourth acquisition in 18 months. This deal means it now has a London base and data centre as well as facilities in Glasgow, Edinburgh, Newcastle, Gateshead and Teesside.

Until 2005, Onyx's growth was funded by private individuals. Since then, its expansion, which has raised turnover from £3m a year to £12m, has been supported by several tranches of venture capital, totalling about £750,000, from NorthStar's £30m CoInvestment Fund - one of the suite of European and RDA funds to which Jeremie is the successor. NorthStar's backing has also helped raise more money from private investors.

If Onyx grows as intended, its proposed deals may reach the size - generally put at £5m upwards - where national venture capitalists get interested. But Mr Stephenson values his relationship with venture capitalists on home turf. "It's that speed to market and professionalism to make decisions without messing around," he says.