NEW FIGURES SHOW RECORD LEVELS OF EQUITY INVESTMENT IN WALES

The Development Bank of Wales has released new data that shows a 66% growth in equity investments in Wales with the figure for 2022/23 reaching £22.9 million. This is just over double from the 2021/22 figure of £11.6 million.

In a challenging economic context, which saw CPI at 10.1% in the 12 months to March 2023, businesses in Wales accessed 516 individual equity and debt investments totaling £124.2 million in 2022/23 through the Development Bank.

 Private sector co-investment of £114.5 million represented a ratio of 1:0.92 and the average deal size grew by 14% to £240,748.

This period also saw equity and debt totaling £20.55 million to finance succession deals for 44 different businesses, an investment of £19.25 million in 114 young entrepreneurs and tourism businesses being awarded £7.8 million by the Wales Tourism Board.

The commercial property sector saw significant growth, with funding for 71,882 square feet of new premises. Investments totaling £6.67 million from the Commercial Property Fund represented almost double the investment made in 2021/22.

Two new products were launched during the financial year, both a key part of the Development Bank’s commitment to helping new and existing customers to address decarbonisation, reduce their energy consumption and drive the low carbon agenda.  The £10 million Green Business Loan Scheme received 25 new enquiries in the first month alone while the launch of the £33 million Green Homes Incentive in July 2022 gives new home developers a reduction in loan fees of up to 2% subject to a qualifying criteria.

Economy Minister Vaughan Gething said: “The Development Bank of Wales is going from strength to strength in providing innovative, responsive support that businesses need now more than ever.

Across a year when economic conditions and uncertainties led many high street lenders to be more risk averse, retrenching their positions, the Development Bank has helped keep a vital flow of accessible finance available to businesses right across Wales.”

He added: “The Welsh Government took bold action in creating the UK’s first regional bank with a service that is able to act at scale while understanding the needs of the Welsh economy.

The broad suite of funds offered by the Development Bank of Wales has helped hundreds of businesses leverage investment and secures the funding they need to invest and grow, and I would encourage businesses to consider whether the bank could support their next steps.”

Chair of the Development Bank of Wales, Gareth Bullock said: “Against a backdrop of rising inflation, economic uncertainty and significant cost of living pressures, we entered the year more determined than ever to ensure that we had the funding and the firepower necessary to meet customer demand.”

I am pleased that we have continued to grow overall investment levels, supporting a broad range of businesses across the nation and playing our part in making sure that ambitious businesses can access the investment they need.

  We will maintain that focus on delivery in the coming year, working together with our stakeholders in the Welsh ecosystem to support people, businesses and communities across Wales.”

Chief Executive of the Development Bank, Giles Thorley (pictured above) said: “As one of the most active venture capital investors in the UK, we’ve continued to work with the private sector and new funds entering the market to maximise the value for Wales. 

We have also put significant effort into promoting equity as being a key enabler of business growth. It plays an important role in the complete life cycle from seed and early- stage investment through to established, privately-owned businesses looking to fund succession and exit. Indeed, over £20 million was invested in succession deals during the year, retaining wealth and goodwill in Wales.”

He added: “2022/23 has also seen us further grow our role as a responsible investor, evolving our decision-making processes to increasingly focus on environmental, social and governance factors. 

We’ve signed up to the world’s largest voluntary corporate sustainability initiative, Principles for Responsible Investment (PRI) and launched two new products that are already helping fund Welsh businesses to reduce their carbon emissions and embrace the journey to net zero as part of our commitment to promoting and advancing a green future in Wales.

We’ve delivered a creditable performance for Wales in the last year and will continue to focus on maintaining the support for the long-term sustainability of the Welsh economy.”