The number of equity deals amongst SMEs in Wales slightly improved last year but declined on total values, according to new research from the British Business Bank.
The annual Small Business Equity Tracker from the 海角视频 Government鈥檚 economic development bank shows that Wales was only one of five 海角视频 nations and regions to experience growth in equity deal numbers - up 7.2% on 2023 from 69 to 74.
However, the value of deals in Wales declined by just over 12% from 拢129m in 2023 to 拢113m.
For the 海角视频 as a whole the number of deals was down on the 2,412 in 2023 to 2,048 with total values also decliningfrom 拢11.1bn to 拢10.8bn.
The number of disclosed equity deals in Wales last year made up 3.6% of the 海角视频 total (2.9% in 2023) and on value just 1%, compared to 1.2% a year earlier.
London dominance of the 海角视频 equity market reduced slightly in 2024. The share of deals being deployed in English the capital was 47.1% in 2024 (down from 50.8% in 2023). Its proportion of investment was 61.2% , down slight from 61.9% in the previous year and 73.3% in 2020.
The average size of artificial intelligence (AI) equity deals significantly outpaced those in the broader 海角视频 market in 2024, highlighting the sector鈥檚 sustained investor appeal.
Across the 海角视频, the average AI equity deal was 拢8.3m - some 40% greater than the 拢5.7m average deal size in the wider market. At the growth stage, AI deals were even more substantial, averaging 拢36.3m, 2.5 times larger than comparable deals outside the sector, underscoring strong investor appetite driving high valuations.
In Wales, the bank鈥檚 拢130m Investment Fund for Wales (IFW) recently partnered with the Development Bank of Wales to invest in Nisien.AI, a pioneering AI start-up and Cardiff University spin-out. Nisien.AI leverages advanced AI technology to detect and respond to online harms, such as digital conflict, and is already collaborating with the world鈥檚 top five social media platforms.
This new investment will support key hires and accelerate research and development, enabling Nisien.AI to bring new products to market, helping to position them at the forefront of digital safety innovation.
Susan Nightingale, 海角视频 network director, Wales at the British Business Bank, said: 鈥2024 was a challenging year for the 海角视频 equity finance market. Nevertheless, in Wales resilience is being demonstrated with a rise in deal numbers, although a continued drop in overall deal values reveals the ongoing challenges within the Welsh equity market.
鈥淚t is encouraging to see that the appetite for AI is driving value across the 海角视频 equity finance market with large deal sizes. There are a number of ambitious AI companies in Wales, like the Investment Fund for Wales backed Nisein.AI, and others like them, who are looking to scale with a view to becoming major players within the transformational AI sector.
鈥淚t is our hope that among them we will discover Wales鈥 first unicorn. To date British Business Bank equity programmes have supported 56% of 海角视频 unicorns, and it is our job to help create the ecosystem that will allow the Welsh unicorn scene to emerge and prosper.鈥
In Wales, Swansea University leads the way in generating spinout companies, according to Beauhurst鈥檚 fifth annual Spotlight on Spinouts report. Since 2011 the university has seen 58 spinouts, ranking it ninth in the 海角视频 (and first in Wales).
In 2024, university spinouts across the 海角视频 raised 拢1.9bn in equity investment, representing 17% of total investment and accounting for a record 12% of total deals.
Business angels continue to be a significant source of equity investment for start-up and early stage businesses with 70% of angels investing in early-stage businesses. The Small Business Equity Tracker found that two-thirds (64%) of respondents to the Bank鈥檚 survey of 海角视频 angel investors have matched or increased their investments from 2023 to 2024.
To boost the work of the bank鈥檚 established regional angels programme, in 2023 it launched the female-led angel syndication pilot, to support and accelerate the development of female-led angel syndicates across the devolved nations.
The tracker defines an SME as having less than 150 employees or a turnover of less than 拢50m.
