British Business Bank reveals fall in SME equity investment activity in the North West

North West SMEs completed 88 equity deals in Q1-Q3 2023, a 27% decrease compared to the equivalent period in 2022, according to a report from the British Business Bank.

The fall in the number of deals comes alongside a 64% fall in total investment, down to £175.3 million in the same period. The national picture mirrors the local one, with 53% less raised by SMEs through equity finance deals in the first nine months of 2023 compared to the January to September period of 2022.

Despite the nationwide slowdown in investment activity, the North West accounted for 6% of the UK’s total equity investment activity, the third highest proportion outside the capital. Across the Northern economy, investment activity made up 12% of all UK small business equity investments.

The Northern Powerhouse Investment Fund has also played a key role in bringing investment opportunities to businesses in the region. The Fund has delivered over £570 million of direct and private sector co-investment into 608 businesses in the North West creating close to 3,500 jobs since it launched in 2017. Despite investment activity slowing down across the nation, the Bank remains committed to the small business community in the North West by launching its new Northern Powerhouse Investment Fund II (NPIF II), a £660 million fund set to cover the entire North of England.

Dr Sophie Dale-Black, UK Network Director for the North of England at British Business Bank, said:

“It has been a slow year for investment activity across the whole of the UK, with small business equity activity declining nationally. However, it is promising to see that the North West has completed the third largest number of equity deals in the UK outside of London. The North West region is resilient and has a strong small business community, and this further demonstrates the pace at which the region is developing as it continues to strengthen the Northern and national economy.

“The new £660m Northern Powerhouse Investment Fund II is also set to launch in March. As one of the fastest growing regions outside of London, the North West plays a huge role in the assembly of not just the wider Northern economy, but also the national economy. The new fund will allow the British Business Bank to continue this vital work in supporting the regional small business ecosystem.”