Over £27.5bn of private equity and venture capital was invested into UK businesses in 2022 – 22 per cent more than 2019, a BVCA report says.
In total, 1,578 UK businesses received funding last year, with nine in ten being small to medium-sized businesses. Over half of these received follow-on investment.
Most of the investment was concentrated at the early stages, with scale-ups lagging behind. UK venture capital investment contributed £2.3bn into 570 businesses.
The tech sector was the UK’s best performer, raising £13bn – a 15 per cent increase on 2021’s £11.2bn.
Although 2022’s figure was down on 2021’s record-breaking year, which saw £36.1bn invested, it was up on pre-pandemic years.
Out of the regions, the Midlands improved most year-on year, increasing from £2.8bn in 2021 to £5.3bn in 2022. Most of this capital was directed into the IT and Biotech sectors in the area.
Michael Moore, chief executive of the BVCA, said: “Despite the turbulent economic headwinds, the story of private capital investment in 2022 demonstrates the industry’s astonishing ability to grow British businesses, particularly outside of London.
“Although investment levels are above what they were before the pandemic – signalling the global appeal of our burgeoning tech sectors, for example – there remain bumps in the road. The UK faces a particular challenge with later stage funding, and UK pension funds invested only a fraction of what they could in homegrown businesses.
“The Chancellor’s Mansion House reforms are a step in the right direction, but we must ensure that the needs of both savers and investors are considered. We will continue to work with policymakers to create the best possible environment for both.”
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