The North West was the most active region for British Business Bank equity investments outside of London last year, reveals the Small Business Equity Tracker, published today.
During a record year where £8.8bn was put into 2,044 small businesses nationally, the North West of England was second only to London with the proportion of equity deals completed by British Business Bank supported funds – accounting for 10 per cent of all Bank supported fund deals.
The total value of equity investments in the wider market in the North West reached £270m across 117 announced deals1.
This comes as the British Business Bank continues to drive investment into businesses based in the region. The Bank’s share of equity deals going to companies in the North West is up from two per cent just five years ago.
These figures were further bolstered by the introduction of the Future Fund in May 2020, which was designed to increase the availability of early-stage equity finance and support businesses in their response to the Covid-19 pandemic.
The Small Business Equity Tracker, which is compiled annually and is in its seventh year, also revealed that regional imbalances were moving in the right direction. In the overall equity market, the proportion of deals going to companies in London has reduced from 50 per cent in 2015 to 47 per cent in 2020. The volume of equity deals from the British Business Bank going to companies in London reduced further from 63 per cent in 2015 to 42 per cent in 2020. This shift signals a positive change for regional businesses and has been driven by increased activity from the Northern Powerhouse Investment Fund and the Bank’s range of equity programmes.
Despite the positive contribution from British Business Bank supported funds , the area remains under-invested compared to the overall equity market, with the region accounting for just six per cent of all UK equity deals in small businesses in 2020. This is lower than the region’s 11% share of UK high growth businesses.
Dr Sophie Dale-Black, UK Network Director, North of England at British Business Bank, said: “The North West continues to be a hotbed for innovation with a rising number of quality tech and life sciences businesses that are fit for equity investment. At one end of the scale, we are seeing lots of strong early-stage companies that are securing equity finance, then at the other end of the scale there are tech unicorns like The Hut Group that are pulling in multi-billion-pound valuations listing on the stock market.
“While the latest figures are moving in the right direction and do address the regional imbalances in access to finance, more needs to be done to support ambitious businesses in the regions. Given the opportunity available, we would encourage all equity funders tolook to explore the region when it comes to future investments. This will not only support growth for local smaller businesses, but it will act as the catalyst to further fuel the levelling up agenda.”
British Business Bank is a UK Government-owned development bank that supports smaller businesses to access the finance they need to grow and prosper.