Rise in Equity Finance for Smaller Businesses

The UK equity finance market for smaller businesses has bounced back to record highs in 2017, following a decline in 2016, the British Business Bank’s fourth annual Small Business Equity Tracker report has revealed. 

The report, which provides an in-depth assessment of equity finance markets for growing businesses, found total investment value soared in 2017 by 89% to £5.9bn, with the number of equity deals increasing by 6%. This represents a 50% increase from the previous peak in 2015, signalling signs of investor confidence.

Deal sizes have increased across the whole market, with especially pronounced increases amongst the largest deals.

The London region apparently accounted for over half (51%) of all UK equity deals in 2017, followed by the South East (10% of deals), Scotland (8%), the East of England (6%), the South West (6%), and the North West (6%).

There are clusters of strong deal activity developing around the country including in Edinburgh, Manchester, Bristol, Glasgow and the established equity eco-systems around Oxford and Cambridge.

Looking at individual sectors, equity investment in the technology and intellectual property sectors grew to a record high of £2.1bn in 2017.

There was also a large increase in equity investment in business and professional services– up from £680m in 2016 to £2bn in 2017.

“After a weaker 2016 the UK’s SME equity finance market saw a record year of growth in 2017 with investment amounts soaring to £5.9bn,” said Keith Morgan, CEO, British Business Bank. “This is a clear sign of investor confidence in British smaller businesses and their potential for growth.”

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