Record year for equity investment in North West smaller businesses

Dr Sophie Dale-Black

Equity investment in North West small businesses reached record levels in 2021, the latest Small Business Equity Tracker published by the British Business Bank today (June 22), shows.

The latest stats shows that the region saw a 213% increase in the value of equity deals completed in 2021.

The report also highlights a 26% increase in the total number of deals in 2021 compared with 2020.

The high level of deals in the North West forms part of an exceptional year for equity deals in the UK’s smaller businesses, with 2,616 announced equity deals completed at a total value of £18.1bn – nearly double that of 2020.

In the North West alone, the region saw £872m of investment across 160 deals, with the business services sector driving the majority of this growth.

Manchester, Cheshire, and the Liverpool City Region feature in the top 20 equity clusters by number of equity deals from 2019-2021.

Manchester leads the pack in fourth place with an average of 74 deals completed each year, Cheshire was in 12th place (24 deals), and Liverpool in joint 16th place (18 deals).

Drawing the region’s highest levels of investment, Manchester reeled in an average yearly investment value of £333m, ahead of Cheshire (£51m) and Liverpool City Region (£14m).

British Business Bank equity programmes are estimated to have supported 14% of UK equity deals in 2019-21, with these deals forming 19% of the overall UK invested equity amount in that period.

This was largely driven by the Bank’s Enterprise Capital Funds (ECF) programme, Regional Angels Programme, British Patient Capital and the Northern Powerhouse Investment Fund (NPIF).

Recent commitments made in the North West by the bank include a combined £30m to fund managers Deepbridge Capital and Praetura Ventures through the Regional Angels Programme.

NPIF has directly invested £332m into 1,024 businesses across the North of England, alongside an additional £489m of private sector co-investment, taking its total delivery to more than £800m

Sophie Dale-Black, UK Network director for the North of England at the British Business Bank, said: “These results signal the potential for a strong post-pandemic recovery for the North West.

The region remains a hotbed of investment activity outside London, with smaller businesses accessing the vital equity finance needed to grow.

Ms Dale-Black added: “Going forward navigating tough market conditions and focusing on sustainable growth will be key, and that’s where accessing the right finance and wider support will be ever more important. We will continue to provide businesses of the future with the capital they need to start up and thrive in the North West.”