Smaller businesses in the East Midlands secure £109m in equity investment in 2023

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The annual Small Business Equity Tracker, published today, revealed that there was £109m of equity investment into small businesses across 58 deals completed in the East Midlands region in 2023.

This was a 9% decrease in the number of deals compared to the previous year, but a downturn was reflected across the overall market. Overall equity investment for smaller businesses has now returned to pre-pandemic levels, following record levels of activity in 2021 and 2022.

In areas outside of London, the overall number of deals saw a 22% decline to 1098 deals in 2023, and there was a 48% fall in investment to £3.3bn.

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Lewis Stringer, Senior Manager, UK Network East Midlands at the British Business Bank, said: “It is extremely positive to see the East Midlands resilience in comparison to the overall market’s equity investment downturn. We believe that this is a testament to the appetite for business success throughout the region and an overall desire for entrepreneurs to become successful.

Lewis Stringer, British Business BankLewis Stringer, British Business Bank
Lewis Stringer, British Business Bank

“The recent launch of the Midlands Engine Investment Fund II shows our commitment in ensuring that efficient funding is available for small businesses who need it and that East Midlands region continues to flourish.”

In February 2024, the British Business Bank launched the Midlands Engine Investment Fund II, a £400m fund aimed at unlocking additional funding to help smaller businesses in the Midlands prosper and thrive.

Since 2014, more than 21,000 equity deals have been completed across the UK, collectively providing over £90bn of equity finance to support the growth of innovative smaller businesses. While the equity market has seen two consecutive years of contraction, investment values have increased by 182% over the last 10 years, with deal numbers 42% higher.

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Between 2021 and 2023 the British Business Bank supported 15% of UK equity deals and 18% of total investment through its equity programmes. This represented a slight increase from the 2020-2022 period when 13% of deals and 15% of investments were backed by the Bank.

The Bank’s programmes have focused on financing innovative high-growth companies. During 2021-2023, 48% of Bank-supported deals were in the technology/IP-based sector, compared to 42% of deals across the overall market.

The Bank is also more likely to fund university spinouts; these accounted for 13% of Bank-supported deals, compared to 9% across the wider market, with the leading contributors being British Business Investment’s Regional Angels Programme, the Managed Funds Programme, and British Patient Capital.

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