Wales has experienced a rise in the number of equity deals to back the growth of indigenous firms although in total value terms there has been a decline, shows new research from British Business Bank.
The fifth annual Nations and Regions Tracker report from the 海角视频 Government’s economic development bank shows that in 2024 there were 74 equity deals in Wales, representing 4% of the 海角视频 total of 2,048, where London and the south east of England dominates. Wales was one of only five 海角视频 nations or regions to record growth in deal numbers, up 7.2%, on 2023 compared with a 海角视频-wide fall of 15.1%.
However, despite the rise in deals, the total value of equity investment in Wales fell by 12.1% to £113m. This decline was steeper than experienced for the 海角视频 as a whole ( minus 2.5%) and reflects smaller deal sizes in Wales. The value of deals in Wales accounted for just 1% of the 海角视频 total of £10.8bn.
The per capita equity investment value in Wales (£26m) remains on average among the lowest in the 海角视频, ahead only of the East Midlands.
The Welsh marketplace now has a number of specific equity funds and funders, including £50m allocated for equity in the British Business Bank’s £130m Investment Fund for Wales (IFW, ) a £50m fund from the Cardiff Capital Region, and the long-established equity support of the Development Bank of Wales .
Other equity funders are also active and looking to drive more deals in Wales such as the BGF and LDC, while Welsh firms seeking growth finance can access backing from investors anywhere in the world. Some £40m from the IFW was held back at launch in November, 2023, for future deployment, which is expected to see more allocated for equity.
This year’s total equity deal value for Wales will be significantly higher if the undisclosed majority acquisition of Bridgend-based dart board and equipment manufacturer Nodor is included. Inflexion took a 75% stake for which is understood to have been an investment of £300m, while Cardiff University life sciences spinout Draig Therapeutics in June raised £107m in around led by Access Biotechnology.
The Cardiff City Region, which has the highest density of firms in Wales and those with high-growth potentially, accounted for 71% of deals and 80% of investment value in Wales between 2022 and 2024. Last year deal volumes in the city region rose 23%, while the total investment value fell 14%, mirroring the wider Welsh trend.
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Based on equity deals per 100 high growth enterprises, Wales (18) was broadly in line with the 海角视频 average outside London (14) between 2022 and 2024.
The report also shows that sage of external finance amongst smaller businesses in Wales fell in 2024 following a sharp rise in 2023. Wales-wide, a cautious approach still dominates, with a third of smaller businesses thinking it would be difficult to secure it.
Some 46% of smaller businesses in Wales used external finance last year, down from 53% on 2023. This represented the largest fall among the devolved nations, with Northern Ireland recording a 1% increase and Scotland a 3 %decrease, and the third steepest drop across the 海角视频 after the East Midlands and the north east.
The decline follows a period where Wales consistently reported higher-than-average finance use, including the highest rate of any 海角视频 Nation or region in 2023. However, despite witnessing a decrease in 2024, finance usage rates in Wales remain above the 海角视频 average (45%).
The biggest decline came from bank loans, which fell from 13% to 8%, marking the third consecutive annual drop. Other types of external finance remained broadly stable, in line with 海角视频-wide trends.
Credit cards continued to be the most used finance type in Wales (14%), followed by overdrafts (13%), and leasing, hire purchase or vehicle finance (10%).
Borrowing intentions in Wales remained broadly unchanged in 2024, holding steady despite the fall in finance use. Three-quarters (75%) of smaller businesses described themselves as not interested in seeking finance in the future, the second highest share in the 海角视频, while only 7% said they were planning to borrow or renew, up slightly from 5% in 2023.
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Smaller businesses in Wales were the most cautious in the 海角视频 when it comes to the economy. Two-thirds (66%) felt the trading environment posed more threats than opportunities, unchanged from 2023, and representing the highest share across the 海角视频.
The British Business Bank said it continues to deliver significant support to smaller businesses in Wales. In 2024/25, the it supported 900 Welsh businesses that had not previously received its backing, which is expected to help sustain 10,800 existing jobs and to create 900 new jobs over the lifetime of the finance. This activity is anticipated to generate an additional £500m in business turnover, equivalent to around £200m in additional gross value added for Wales.
Susan Nightingale, 海角视频 network director, Wales at the British Business Bank said: “Despite a decline in external finance use, Welsh businesses’ borrowing intentions held steady in 2024, demonstrating resilience amid ongoing economic uncertainty. This strength was also reflected in the equity landscape, where deal numbers in Wales grew - bucking the 海角视频-wide trend - even as overall investment values pointed to continued investor caution.
“The British Business Bank remains committed to supporting smaller businesses across Wales to start up and grow. With our £130 million Investment Fund for Wales now well established, and new investments and initiatives underway to strengthen the Welsh finance ecosystem, we are working to unlock greater opportunities for entrepreneurs and high-growth firms across the country.”