A North East cocktail bar group is expanding its regional footprint after securing a six-figure investment to support the opening of a new Durham venue.
Mother Mercy Hospitality Ltd has received backing from NPIF II – NEL Debt Finance, managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II.
The deal marks NEL’s third investment in the group and will help fund Mother Mercy’s fifth cocktail bar, which opens in Durham this Saturday (June 13).
The new venue follows sites in Newcastle’s Cloth Market, Fenwick, Grey Street and Heaton, as the business continues to build its presence across the North East.
Founded in 2019 with its original basement bar on Cloth Market, Mother Mercy has developed a reputation for creative cocktails, skilled mixologists and a premium guest experience.
The group has twice been ranked among the UK’s Top 50 Cocktail Bars in the last three years and is also accredited as a Great Place to Work.
Bosses say that part of the latest investment will be used to improve existing venues, increase capacity and further enhance the customer experience.
Neil Donachie, founder and managing director of Mother Mercy, 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.”
Mother Mercy now employs 34 staff and has gained experience across high street, concession and neighbourhood bar formats, giving the business a stronger platform for further growth.
The latest funding also reflects NEL’s ongoing support for the group as it continues to scale, strengthen operations and build long-term resilience across its venues.
Jane Siddle, senior investment executive at NEL Fund Managers, added: “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 Newcastle, Leeds and Darlington-based Square One Law, provided expert legal advice throughout.
Declan added: “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.”
The £660 million 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 British Business Bank, added: “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.”
Find out more about Neil and the concept behind Mother Mercy in his interview to our sister publication, N, here.
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