Equity investment into smaller businesses across the North West fell sharply in 2023, new figures show. Tony McDonough reports

Total equity investment into smaller businesses across the North West of England declined by 67% to £225m in 2023, new data reveals.

According to the British Business Bank’s annual Small Business Equity Tracker the volume of equity deals also declined in 2023, falling by 31% to 114 deals.

Between 2021 and 2023, 5.9% of equity deals in the UK went to the North West, compared with 6.4% of British Business Bank supported equity deals.

A recent expansion of the Northern Powerhouse Investment Fund II (NPIF II), will also allow the Bank to increase the funding it provides to entrepreneurs in the region.

These findings reflect those across the UK. Following the market downturn in the middle of 2022, equity investment for smaller businesses has returned to 2019 levels in 2023. Full-year data shows that investment declined by 48% to £8.8bn. Despite this, UK equity investment remains 182% higher than a decade ago.

The UK has also overtaken India as the third largest venture capital (VC) market in the world, behind only the US and China, and accounted for 5.8% of global VC investment between 2021 and 2023.

Delyth Lloyd Edwards, senior network manager for the North West of England at the British Business Bank, said: “The past few years have been challenging for businesses across the UK, resulting in a decline in equity investment, which has been echoed across the North West. 

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“Despite this, the North West continues to be a bustling hub for equity investment, making up the third-largest amount of equity activity outside of London in the last two years. This is boosted by the region’s strong universities and life sciences sector.

“Despite a trying few years, the North West’s business ecosystem has remained resilient and continued to adapt to new economic pressures.”