Small businesses secure £338m in equity investment - report
Smaller businesses in the West Midlands secured an impressive £338m worth of investment across a total of 68 deals in 2021, new figures reveal.
The number of equity deals in the region increased by 13 per cent compared to 2020 but total investment is down 12 per cent over two years, although the West Midlands is still at historically high levels of cash outlay.
Figures issued by the British Business Bank 's Small Business Equity Tracker 2022 reveal that investment in the region is running at 93 per cent higher than 2019 levels ( £115 million).
Nationally, equity investment in UK smaller businesses reached record levels of £18.1bn in 2021, according to the British Business Bank. UK equity investment more than doubled in 2021 compared to the previous year - the highest annual investment amount since the data series began.
In the West Midlands, the technology and IP-based business sector attracted the most funding, with technology and IP-based businesses securing £244m. This is up from £28m in 2020, a 771 per cent increase despite only an additional three deals (25) seen in the sector in 2021, indicating notably higher deal sizes.
Medical technology also appears prominently, seeing nearly £188m worth of investment across eight deals, up from just over £0.9m in 2020 seen over five deals. However this can be partly explained by one single very large deal. Quanta, a medical device company received a £176m funding round in Q2 2021.
Dr Sophie Dale-Black (pictured), UK network director, Midlands at the British Business Bank, said: “The West Midlands is home to many innovative businesses that are hungry for growth, shown by a healthy level of investment and deals secured. This is a clear sign of investor confidence in the region 's smaller businesses following the pandemic.
“The emergence of tech in the region is welcome and reflects the many initiatives underway to support this cluster.
“Whilst there are signs of this momentum continuing in early 2022, smaller businesses will be mindful of potential economic headwinds in the coming months and years. We will continue to provide businesses with the access to finance they need to start up and thrive in the West Midlands. ”
The report shows encouraging signs for regional businesses, including an 11 per cent increase in equity investment deals in English regions outside of London and devolved nations to 1,330 deals worth a total of £6.2bn.
The British Business Bank 's equity programmes supported around 14 per cent of all equity deals between 2019 to 2021. The Midlands Investment Fund (MEIF), delivered by the Bank, is one of its programmes providing commercially focused support through debt and equity finance.
The Fund has now invested over £170m into small businesses across the Midlands since its launch in 2017.
A total of 769 investments were made in 546 businesses throughout both the West and East Midlands. An additional £270m of private sector co-investment has also been leveraged as a result of the MEIF 's support.