South West Just One of 2 English Regions Experiencing Increase in Number of Equity Deals
According to The British Bank’s annual Small Business Equity Tracker, the South West achieved 155 equity deals during 2022 and was one of only 2 regions recording an increase for that year. This result (worth circa £540m) was down in value compared with the previous year, but 2021 (a record year for the region) included several £50m-plus deals. For the fuller picture please read the news bulletin below issued by Insider News Media today.
Roger Mundy, Managing Director, Beardsley Theobalds, 16th June 2023
SOUTH WEST BUOYED BY INCREASE IN EQUITY DEAL VOLUME
The South West was one of just two English regions to see an increase in equity deals in 2022, according to new data, with three deals a week completed on average with a total value of more than £500m.
The British Business Bank's annual Small Business Equity Tracker shows that 155 equity deals were completed in the South West last year, an increase of 4 per cent.
Yorkshire and The Humber and Wales were the only two other nations or regions that saw an increase in deal numbers.
Overall deal value in the South West was down by 32 per cent to £540m following a record year in 2021, which included several £50m-plus deals. Nationally, there was an 11 per cent decline in total UK investment value to £16.7bn, driven by a downturn in market conditions.
Steve Conibear, UK network director South West, said: "In the South West deal volumes held up well compared to nationally, but values fell, reflecting the wider market.
"Encouragingly however, the Bank's geographically-focused programmes are playing an important role in increasing access to SME equity finance. Our regional fund in Cornwall and Scilly supported a third of all equity deals in that area in 2022 and we will shortly launch our £200m South West Investment Fund.
"This is the first of our £1.6bn Nations and Regions Investment Funds and covers the whole of the South West, offering equity investments of up to £5m."
The report notes that the downturn reflects venture capital (VC) fund managers reducing their dealmaking activity and focusing more on business fundamentals, to compensate for the "rapid capital deployment in previous months".
Elsewhere, the report adds that the "creation of spinout companies is an important avenue through which founders and universities can commercialise cutting edge academic research".
University spinouts received a record 12 per cent of total equity investment in 2022, at a value of £2bn. The average deal size for university spinouts was £8.9m, which was 33 per cent higher than the wider market. Of all equity deals in the UK in this year, 8 per cent were in university spinouts, totalling 226 deals.
The South West saw 12 such deals worth £33.8m. This included deep tech firm FocalPoint, which raised £15m to develop its GPS navigational technology, and University of Bristol spinout QLM Technology bringing in £12m to develop a new type of camera that can see and accurately quantify greenhouse gas emissions.Meanwhile, cleantech companies in the South West received £7.1m over eight deals in 2022. This included a £1m investment in Gloucester-based Wild Hydrogen and Cornwall marine engineering firm Triskel Marine securing £3.2m, including £1m from the bank's Cornwall and Isles of Scilly Investment Fund.