North-west SMEs attracted £872 million in equity investment in 2021

SMEs in the North-west secured £872 million in equity investment, triple the previous year’s figure, in 2021 according to the latest data released by the British Business Bank.

Across the whole of the UK, smaller businesses attracted over £18 billion in equity investment, an increase of 88% on the previous year, according to the government-owned development bank’s Small Business Equity Tracker. The tracker data also revealed investment in North-west SMEs to be up 213% on 2020 figures. While the economic downturn in 2020 driven by the Covid-19 pandemic did contribute in part to sizeable increase in equity investment, North-west SMEs saw a 20% increase in previous performance for the two-years from January 2020 to the end of 2021.

In the North-west, business services businesses represented the majority of the 160 SMEs to secure equity investment in 2021, while nationwide it was tech companies that saw the biggest growth in finance secured. Greater Manchester was the main centre for SMEs securing investment, accounting for 74 deals, and the fourth most active area in the UK in the 2019-21 period, with Cheshire and the Liverpool City Region also making the top 20.

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 of London, with smaller businesses accessing the vital equity finance needed to grow.

“Going forward navigating tough market conditions and focussing 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.”

Commenting on the national picture for SME equity finance, Catherine Lewis La Torre, CEO, British Business Bank, said:

“The UK’s small business equity finance market has continued to grow, achieving a new record last year. The momentum continued in Q1 of this year – a clear sign of investor confidence in UK smaller businesses following the pandemic.

“The Bank supported 18% of all announced UK equity deals in 2021, showing that the work we do, and our focus on investing with purpose, has never been more important. The UK’s position as a hub for the technology sector is apparent and the growth in clean tech deals shows an increasing investor demand for sustainable businesses to grow. We will continue to provide businesses of the future with the capital they need to start up and thrive in the UK.”