The Business Magazine March 2024

Smaller businesses raised £276 million of equity investment in the West Midlands in 2022

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Sophie Dale-Black

A total of £276 million in equity investment was raised by smaller businesses across the West Midlands in 2022, according to the British Business Bank’s annual Small Business Equity Tracker.

Published today (Thursday) the Bank’s report has revealed that there were 76 deals completed in the region - but because of the downturn in the market, the West Midlands attracted 22 per cent less in investment on the previous year.

Despite the downturn and fall in investment, the West Midlands is the eighth strongest region in the UK in terms of total equity finance in 2022. Between 2020 and 2022 the Bank also allocated a larger proportion of deals (4.2 per cent) to the West Midlands compared to the overall equity market (2.8 per cent).

In areas outside of London, the number of deals fell by 10 per cent in 2022 to 1,337 deals. The total investment value in these areas also fell by 11 per cent to £5.8bn.

The decline in the number of deals was twice as fast as the decline experienced in the London region.

The biggest concentration of investment is once again focused in London, and this highlights the need of the Bank’s regionally focused programmes including the Midlands Engine Investment Fund (MEIF) which plays an important role in increasing the supply of finance in the Midlands.

Dr Sophie Dale-Black, UK Network Director, Midlands at the British Business Bank, said: “2021 was an incredibly strong year for equity investment in the West Midlands and it is positive to see such a huge amount of equity investment coming into the region to help smaller businesses to grow and this shows there is still a desire for that to continue.

“But, as we start to feel the economic downturn, the decline in investment in 2022 reflected concern about the overvaluation of deals, and the effects of higher inflation and rising interest rates.

“The Bank continues to back smaller businesses in the region and will monitor these changing equity finance conditions carefully, and stands ready with programmes such as the Midlands Engine Investment Fund to support finance markets in the region.”

By Peter Davison

Peter Davison is deputy editor of The Business Magazine. He has spent his life in journalism – doing work experience in newsrooms in and around Bristol while still at school, and landing his first job on a local newspaper aged 19. By 28 he was the youngest newspaper editor in the country.

An early advocate of online news, he spent the first years of the 2000s telling his bosses that the internet posed both the biggest opportunity and greatest threat to the newspaper industry and the art of journalism. He was right on both counts.

Since 2006 he has enjoyed a career as a freelance journalist. He lives in rural Wiltshire with one wife, two children, and three cats.