Next Street receives $30 million to help spark business growth, jobs
Howard Manly | 2/7/2012, 7:22 p.m.
Boston-based Next Street, the merchant bank specializing in small and mid-sized urban companies, has received a significant vote of confidence from Wall Street as Citi Community Capital and Enterprise Community Loan Fund recently announced they are investing a combined $30 million in the new Next Street Opportunity Fund.
Next Street offers financing and strategic advice to companies with annual revenues of $5 million to $60 million that are already significant employers in urban markets.
The Opportunity Fund supports business owners in low- and moderate-income communities with strategic planning, organizational development and marketing services. Use of the firm’s advisory services is a requirement for access to the fund.
“Management expertise is as critical as capital in getting a company to the next level,” says Next Street President Ronald L. Walker, II. “We’re bringing a Fortune 500 skillset to urban small business.”
The investment in Next Street comes on the heels of another significant investment in minority business development. Last September, the U.S. Department of Commerce announced that The Greater New England Minority Supplier Development Council (GNEMSDC) would receive about $1.4 million in funding over the next five years to manage a federal program designed to increase the growth of minority businesses supplying major firms.
GNEMSDC added about $600,000 of its own money to further bolster the $1.4 million federal grant, bringing the total operating budget of Boston’s MBDA site to about $2 million. With help from the new minority business centers, minority-owned businesses can learn how to increase their competitiveness and help grow the U.S. economy.
And according to Next Street’s Walker, growth is the name of the game. Founded in 2005, Next Sreet was started on the idea of providing growing companies in urban markets with the same level of expertise that investment banks, Madison Avenue and the elite consultancies provide to Fortune 500 companies.
Its portfolio includes companies now generating about $600 million in annual revenues. Two-thirds of the companies are woman or minority owned and employ over 4,000 people. The firm has worked with more than 100 companies over the years, including the Bay State Banner.
Without citing any proprietary details, Walker talked about one case that involved a very large, minority-owned construction company. They sought Next Street’s strategic advice three years ago. Walker said Next Street was able to help the company develop a strategy for growth, a plan of succession, and most important, helped increased the company’s revenue almost “two-fold,” Walker said.
Part of the problem is obtaining what Next Street described as “growth capital.” And that is where the $30 million investment from Citi Community Capital and Enterprise Community Loan Fund comes in.
“We are proud to invest in the Next Street Opportunity Fund and show our deep commitment to supporting small businesses,” said Vikram Pandit, chief executive officer of Citigroup. “Helping small companies grow and create jobs strengthens our communities and is critical to the economic recovery.”
In September 2011, Citi announced an overall commitment of $24 billion in lending over three years: $7 billion in 2011, $8 billion in 2012 and $9 billion in 2013.