Small UK businesses received a record £6.7 billion in equity finance investment in 2018, a new study has revealed.
The finding forms part of the British Business Bank’s (BBB’s) new Equity Tracker Report for 2019, which provides an ‘in-depth assessment’ of equity finance markets for growing businesses.
According to the figures, the UK equity investment market has grown some 72 per cent in just two years.
In real terms, this saw equity finance investment in small businesses soar to a record £6.7 billion in 2018, an increase of five per cent compared to the year previous.
This has been, in part, attributed to rising interest in regions outside of London. The East of England, North East and West Midlands, for example, saw equity investment increase by 118 per cent, 115 per cent and 81 per cent respectively in 2018. In total, the value of equity finance investment outside of the capital increased by 29 per cent to £2.8 billion.
Unsurprisingly, the tech sector still dominates the equity investment market. According to the report, tech-focused small businesses attracted 44 per cent of total finance investment in 2018 – an increase of 24 per cent compared to the year previous.
Commenting on the figures, Keith Morgan, CEO of the BBB, said: “This research by the British Business Bank shows that the UK’s SME equity finance market saw a record year in 2018 with investment amounts soaring to £6.7 billion. This is a clear sign of investor confidence in British smaller businesses and their potential for growth.
“We are particularly pleased to see a 29 per cent increase in investment outside of London. The British Business Bank continues to work to address regional imbalances in access to investment to ensure smaller businesses across the UK can access the equity finance they need to fulfil their growth potential.”
The Federation of Small Businesses (FSB) Policy & Advocacy Chairman Martin McTague added: “The UK is a leader in the tech space and that’s absolutely to be welcomed. But we do need to look seriously at how we encourage more equity financing for sectors outside of those traditionally associated with this kind of investment.”
The 2019 Equity Tracker Report can be read in full here.
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