The British Business Bank has made 117 equity investments in North-west businesses, worth £270 million, in 2020, the most of any UK region besides London.
2020 was a record year for the government’s development bank, which supported businesses nationally with over £8.8 billion of investment made into over 2,000 businesses. The North-west accounted for over 10% of all Bank supported fund deals, up from just 2% five years ago.
The British Business Bank’s record year was 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 bank’s Small Business Equity Tracker, compiled annually, also revealed that regional imbalances in how funding was distributed to businesses around the country were beginning to be rectified. The volume of equity deals from the British Business Bank going to companies in London reduced from 63% in 2015 to 42% in 2020, and has been attributed to increased activity from the Northern Powerhouse Investment Fund and other equity programmes supporting more businesses in the UK’s regions.
Despite the best efforts of the UK government’s development bank, the North-west remains under-invested, with the region accounting for just 6% of small business equity deals when including private sector investors, despite 11% of the UK’s high growth businesses being in the region.
Dr Sophie Dale-Black (pictured), 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.”?