British Business Bank’s 2023 ninth edition of Small Business Equity Track report has been published, providing an in-depth assessment of equity finance markets for growing businesses across the UK. The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The report is intended to inform the development of the Bank’s strategy in making finance markets work better for smaller businesses, as well as informing wider developments in both markets and government policy. The findings reveal that UK small business equity investment declined 11% in 2022 driven by a downturn in market conditions in the second half of the year, as ongoing market challenges continue into 2023.
Key findings from the report include:
- Following a record year in 2021, the number of investment deals fell in 2022 by 7% to around
2,700, with the total investment value declining 11% to £16.7bn
- London accounted for half of UK equity deals in 2022 and 65% of total investment value.
- University spinouts raised the highest amount of equity finance on record, totalling 12% of all UK
equity investment during the year
- The UK has scaled a number of technology sectors through its VC ecosystem, with life sciences
one of the largest deeptech sectors
Louis Taylor, CEO of British Business Bank commented,
“2022 proved to be a year of two halves for small business equity investment, with record levels of finance raised over the first two quarters of the year, followed by a 47% decline in total investment during the second half.
While it is still too early to tell the full scale of the downturn in investment, the UK’s broad and advanced equity finance markets are well placed to support recovery”.
Read the full report here.