It’s coming up to eight years since the Development Bank of Wales was first launched. Our remit is to address gaps in the commercial funding market and to provide sustainable, effective finance for businesses that have a positive effect on the economic development of Wales.
Importantly, we support businesses with real commercial promise that are at the heart of local communities across Wales. Working across a broad range of sectors, including those that offer the highest growth opportunities, we invest on commercial terms with our investment decisions being based on both financial and social returns.
From tourism and hospitality to life-sciences and defence, our purpose is to fuel possibilities by making sure that Welsh businesses can access the funding that they need to start-up, scale-up, adopt new technologies and create employment opportunities.
We’re proud of the work that we do and the difference that we’re making, operating as a patient investor.
The last financial year has seen a significant increase in demand for funding that has resulted in our biggest year to date.
Our team helped 502 businesses to create and safeguard 6,185 jobs across Wales with debt and equity funding totalling £152m. It brings the total amount invested in SME businesses and property developers by the development bank since our launch in 2017 to £958m.
We now have £2bn in funds under management and a portfolio of more than 3,600 small business customers. Average deal size has grown to £272,000 while our funding leveraged additional private sector co-investment of £64.5m in 2024/25.
We’ve also seen a 26% increase in funding for the property sector with £47.6m in 2024/25 compared to £37.9m in 2023/24. Our team provided the funding for the development of 2,626 sq ft of commercial space and supported 23 property businesses working on 24 new developments with 390 new homes delivered, 125 of which were affordable.
These numbers include our largest ever investment with £17.5m for Tirion Homes to develop Parc Eirin, a major low carbon mixed-tenure residential development just west of Tonyrefail. With a further £7m in grants from the Welsh Government’s Innovative Housing Programme, it’s a great example of the private and public sector working together to increase the supply of affordable, sustainable and good quality housing in Wales.
As a unique source of business funding in Wales, we provide debt and equity funding ranging from £1,000 up to £10m. In addition to our property funds, we invested £84.1m in debt and £18.7m in equity during 2024/25. A real highlight of the year was the successful completion of five exits that generated £7.4m in returns.
This includes Wrexham-based med-tech business Aparito that was acquired by global pharmaceutical company Eli Lilly and Company last year, giving us an initial return of 2.9 times on our £1.2 million equity investment.
With more than a third of all funding in 2024/25 going to businesses in North Wales and support for a record 101 young entrepreneurs ranging in age from just 19 to 30 years old, we’re focused on making it quicker and easier than ever before for small businesses to get the funding that they need to start-up and grow.
In fact, we’ve recently made several changes to our micro loan facilities, including classifying any investment from £1,000 to £100,000 as a micro loan, and removing 1% arrangement fees making it faster and more affordable for the smallest of businesses to access the funding they need. 308 micro loans were completed in the year while more than 80% of the businesses we backed were micro businesses with fewer than 10 employees.
Despite these achievements, no business can afford to stand still or rest on its laurels. The ongoing geo-political challenges and economic difficulties mean that we must continue to evolve, to meet the changing needs of our customers and use our skills and knowledge to extend our support for the Welsh economy.
Our presence on the ground throughout Wales is important, particularly as the mainstream lenders scale back on in-person decision making. This evolution is likely to increase the gap in the market that does not have sufficient investment support - it is our role to fill that ever-widening gap.
SMEs represent more than 99% of all businesses in the º£½ÇÊÓƵ and, together they account for 60% of º£½ÇÊÓƵ employment and 48% of business turnover. We’ve got to increase the flow of capital for these businesses which is why we welcome the º£½ÇÊÓƵ Government’s announcement of plans to consolidate the public sector pension schemes and to require them to invest a higher proportion of their assets in the º£½ÇÊÓƵ. This presents a real opportunity, and we must ensure that Wales benefits directly from this additional capital investment.
As we reach the end of the first quarter of our new financial year, we are focused on the opportunities ahead and receptive to change. We’ll remain supportive of government policy and future aspirations by delivering debt and equity funding with a social impact. Ultimately though it is our people that are at the heart of our success.
Having been rewarded with the Great Places to Work Award and named in the top 30 best places to work in the º£½ÇÊÓƵ, we value our people and will continue to do all that we can to attract and retain the very best in the industry.
For us, it is all about bringing ambitions to life and fuelling possibilities for both our customers and our people. Together, we’re unlocking potential and building a better Wales.
