Welsh firms still showing resilience and strength

WALES has experienced a rise in the number of equity deals to back the growth of indigenous firms but in total value terms there has been a decline, new research from British Business Bank shows.

- SION BARRY

The fifth annual Nations and Regions Tracker report from the UK Government's economic development bank shows that in 2024, there were 74 equity deals in Wales, representing 4% of the UK total of 2,048, where London and the south east of England dominates.

Wales was one of only five UK nations or regions to record growth in deal numbers, up 7.2% on 2023, compared with a UK-wide fall of 15.1%.

However, despite the rise in deals, the total value of equity investment in Wales fell by 12.1% to £113m.

This decline was steeper than experienced for the UK as a whole (minus 2.5%) and reflects smaller deal sizes in Wales. The value of deals in Wales accounted for just 1% of the UK total of £10.8bn.

The per capita equity investment value in Wales (£26m) remains on average among the lowest in the UK, ahead only of the East Midlands.

The Welsh marketplace now has a number of specific equity funds and funders, including £50m allocated for equity in the British Business Bank's £130m Investment Fund for Wales (IFW,) a £50m fund from the Cardiff Capital Region, and the long-established equity support of the Development Bank of Wales.

Other equity funders are also active and looking to drive more deals in Wales such as the BGF and LDC, while Welsh firms seeking growth finance can access backing from investors anywhere in the world.

Some £40m from the IFW was held back at launch in November, 2023 for future deployment, which is expected to see more allocated for equity.