The total value of disclosed equity deals in Wales increased by 23% in 2023, despite the number of deals declining 8%.
According to the British Business Bank’s annual Small Business Equity Tracker, the value of deals in Wales was up from £86.5m in 2022 to £106.1m. The actual number of deals was down year-on-year from 73 to 67.
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For the UK as whole deal values declined by 48% to £8.8bn in 2023, while the number of deals fell by 25% to 2,152.
Investment value in Wales accounted for 1.2% (compared to 0.5% in 2022) of total UK equity investment, while the number of deal accounted for 3.1% (2.5% in 2022) of the total UK number.
Equity deal numbers fell across all UK devolved nations and regions in 2023. The fall in Wales of 8% was the lowest of all UK nations and regions, followed by the East Midlands with a decline of 9%. Three deals accounted for over 40% of total investment in Wales last year. They were Cardiff-based cyber business Coincover (£24.8m), Cwmbran-based advanced digital advertising specialist Novatiq (£11m) and Cardiff-based payment authentication and verification solutions specialists MyPinPad (£10.4m).
Government funded equity funds – including those from the Development Bank of Wales the British Business Bank’s £130m Wales Investment Fund and the £50m fund from the Cardiff Capital Region -supported 33% of all announced equity deals in Wales last year.
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Susan Nightingale, director, UK network, devolved nations at the British Business Bank, said: “As has been the case globally, 2023 was a tough year for the UK equity finance market. However, despite the continued challenges of higher interest rates and fewer exit opportunities, it is encouraging that investment now looks to be stabilising at over £2bn per quarter for smaller businesses.
“The UK has also become the third largest venture capital market in the world, overtaking India, and is the largest market in Europe, accounting for more than a third of investment across the continent. This demonstrates that the UK is building on its position as a global leader in venture capital, and this presents a substantial opportunity for both domestic and international investors.
“The picture in Wales is more positive than elsewhere, with equity deal numbers remaining resilient despite taking a dip, and investment value rising. As we move through 2024, the recent launch of the bank’s £130m Investment Fund for Wales will continue to boost economic growth by providing a range of commercial finance options, including equity investments of up to £5m.”
