Fall in equity investment deals in Wales shows new research

The British Business Bank research also shows a sharp fall in the value of reported equity deals in Wales

The number of equity deals and their value have fallen sharply in Wales, shows new research from the British Business Bank. According to its latest Small Business Finance Markets report, in the first three-quarters of 2025 there were 26 reported equity deals, a fall of 53% on the same period in 2024 when 55 deals were confirmed.

The fall in percentage terms was the highest of any UK nation or region. The only nations or regions to experience a year-on-year rise were Northern Ireland, up 35%, west Midlands, up 6% and Yorkshire and the Humber, up 4%. For the UK as whole there was a fall of 23% to 1,238 deals. While down 27% year-on-year, London accounted for 46% of total UK deals, followed by Scotland 11% and the south east of England, 9%.

The number of deal in Wales, based on research by Beauhurst, made up 2% of total UK deal, compared to 3% in 2024.

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The 26 equity investments had a combined value of £23m, compared to £62m a year earlier – a fall of 63%. The Welsh deals on value made up just 0.3% of the UK total of £7bn. In 2024 the contribution was higher at 0.7% of the total UK value of deals of £8bn.

For the UK as whole the value of deal was down 20% of the first three-quarters of 2025. London dominated on with 60% of the UK total(£4.1bn), followed by Scotland with 11% (£757m).

The report also shows that at the start of 2025, there were 194,200 businesses in Wales – compared to 220,200 at the start of 2024, accounting for 3% of the UK total of 5.69 million. The fall of 12% in the Welsh business population, contrasted with modest growth across much of the UK. The decline was largely driven by a reduction in unregistered businesses without employees, differing from the UK-wide trend where growth in the business population was supported by increases in this segment.

In 2025, there was 10,245 business births in Wales, representing 3% of the UK total of 314,000). Welsh business creation levels remained among the lowest in the UK. Its recorded enterprise rate of 742 businesses per 10,000 adults was around half the level seen in London (1,436) and below most UK nations and regions. Across the UK overall, start-up activity showed modest improvement overall, with 314,000 new businesses created in 2025, up 1% year-on-year.

The five-year survival rate for Welsh businesses founded in 2019 stood at 38%, matching the UK average, but ranking joint third lowest among UK nations and regions. Survival outcomes varied widely across the UK, with the highest rates recorded in the South West (44%) and Northern Ireland (43%).

Smaller businesses continue to play a significant role in Wales’s economy, accounting for 74% of total private sector employment – the second highest proportion among UK nations and regions, behind Northern Ireland (77%).

Employment in Wales is spread across a wide range of firm sizes, with the largest share concentrated in businesses employing fewer than 50 people, highlighting the importance of smaller firms to job creation and economic activity across the country.

Overall UK lending markets showed signs of gradual improvement, with gross SME bank lending increasing by 9% to £68bn in 2025. Across the UK, challenger and specialist banks continued to expand their role in smaller business lending, accounting for 60% of gross SME bank lending in 2025.

Susan Nightingale, director, UK network, devolved nations at the British Business Bank – the economic development bank of the UK Government – said: “Smaller businesses remain fundamental to Wales’s economy, particularly as employers across communities and sectors. The findings in this year’s report highlight the pressures many businesses continue to face in a challenging economic environment including reduced investment activity and slower business creation.

”The British Business Bank is committed to improving access to finance and supporting innovation-led growth across Wales. Through initiatives such as the Investment Fund for Wales, we are helping ambitious businesses access the funding they need to scale and build resilience for the future.

“The fund recently completed its largest investment to date – a £3.5m equity investment into industrial services firm Advantiv – marking an important milestone and supporting the company’s expansion, new UK locations and operational innovation.”