North West small business equity investment declined 22% in 2022

The North West recorded a 22% drop in the value equity investment deals for small businesses in the region in 2022, according to analys from the British Business Bank.

The drop follows a record year for small business equity investment in 2021 following the coronavirus pandemic, when £882 million of investment across 175 deals were recorded, with particularly strong activity in the professional services sector.

The total value of investments fell to £685 million across the region in 2022, although the number of deals only fell to 162, a 7% decrease on the previous year. The decline has been attributed to the growing uncertainty for the UK economy as a whole making for a more cautious investment market, with similar declines recorded across all regions.

Despite the drop, the British Business Bank is optimistic for the North West’s equity investment market moving forward, thanks to the strength of the region’s universities in driving innovative new businesses. The region is a also a strong centre for fast-growing industries including the digital and technology sector, life sciences, advanced manufacturing and the creative industries.

Dr Sophie Dale-Black, UK Network Director for the North of England at the British Business Bank, commented:

“The last few months have certainly been challenging for businesses in the North West. However, the strength of the region’s universities, a hotbed for equity investment, should be a source of optimism. The British Business Bank, and our regional delivery partners, are well poised to support businesses in the North West with significant growth potential.” 

The British Business Bank’s annual Small Business Equity Tracker also revealed the scale of the government-backed economic development bank involvement in the UK investment market.

Between 2020 and 2022, British Business Bank’s equity programmes supported 13% of all equity deals and 15% of total investment nationwide. Overall, the Bank remains more likely to invest in tech businesses than the wider equity market, with 48% of Bank-supported deals in the sector, compared to 42% across the overall market, in 2020-22. Furthermore, 12% of all Bank-supported deals were for university spinouts, compared to 9% of wider market deals.