Equity investments into smaller UK businesses reached a record £18.1bn in 2021, new data from the British Business Bank (BBB) has found.
This represents an 88 per cent increase, year-on-year.
During the first quarter of 2022, this momentum continued with £7.6bn of equity investments reported – the highest amount on record for a single quarter, and almost double the £4.3bn invested in the first quarter of 2021.
Catherine Lewis La Torre, chief executive of the BBB, said that this was “a clear sign of investor confidence in UK smaller businesses following the pandemic.”
She added that BBB programmes supported 18 per cent of all announced UK equity deals in 2021, “showing that the work we do, and our focus on investing with purpose, has never been more important.”
“We will continue to provide businesses of the future with the capital they need to start up and thrive in the UK,” she added.
Small business minister Paul Scully praised the BBB for “playing a vital role in helping smaller businesses across the country to not only recover from the global pressures we’ve been facing, but to grow and thrive into the future.”
“Equity investment is at the highest levels on record but we’re not going to rest on our laurels,” he said.
“We’re continuing to do everything we can to back UK businesses and livelihoods, including through Help to Grow, increasing the employment allowance and slashing fuel duty.”
The BBB data also found that investment in UK tech companies has doubled year-on-year, from £4.1bn in 2020 to £8.2bn in 2021.
The UK’s venture capital (VC) market remained the largest in the world last year, although France, Germany and Sweden have seen faster growth in the size of their VC markets since 2015.
The BBB also reported that more overseas investors are bullish on British business. Foreign investors were involved in equity deals to the value of £13.5bn last year, which is equivalent to 75 per cent of the total £18.1bn invested during the period.