£51 million of loans and equity investments have been made into 220 Welsh businesses by the Development Bank of Wales during the six-month period from April to September 2021.
Half-year figures published today, 15th November 2021, by the Development Bank report that the £51 million has attracted additional private sector investment of nearly £38 million and has helped to create or safeguard over 1,370 jobs.
A 31% increase in the number of new business starts in Wales in the year to Quarter 1 2021 was noted in the latest annual report by Economic Intelligence Wales. This is reflected in a significant increase in micro loans of up to £50,000 provided to new businesses which are up by over 60% compared to the same period last year. 66 new businesses have been supported with £1.5 million to date compared to £0.9 million in the same period last year.
The numbers show strong interest from businesses looking to secure equity investment. Significant interest from co-investors is helping to diversify the market and increase the overall volume and value of deals. £4.2 million of direct investment into early stage, technology businesses has attracted £23.2 million of private sector investment – this figure has more than doubled compared to the same period last year.
Angels Invest Wales, the largest angel network in Wales, is also seeing increasing interest from businesses who are recognising the benefits of securing capital and expertise through angel syndicates. The network facilitated £2.4 million in angel investment compared to £0.7 million in the same period last year.
Demand for funding from the property sector remains strong, with developers needing flexible funding to help manage supply chain issues resulting from the effects of Covid-19 and Brexit.
Chief Executive of the Development Bank of Wales, Giles Thorley, believes that the demand for funding reflects the importance of continued support for businesses as the economy recovers. He said: “There can be no doubt that Welsh businesses are doing everything they can to rebuild and get back on track. It’s encouraging to see that the entrepreneurial spirit and determination to succeed is stronger than ever with many people deciding to start a new venture. The increased equity co-investment activity from UK based and international investors who are seeing real potential in the Welsh economy is particularly welcome.
“With the Welsh Government’s Net Zero Wales plan launched, it’s positive to see the increasing demand for funding from businesses looking to invest in sustainable projects and the development of innovative solutions that will help fight the battle with climate change. As a long-term generalist investor, our investment activity reaches across business stages, sizes and sectors. Market demand shapes our activity and it is our role to address gaps and continue providing the support and funding that is needed for Welsh businesses to succeed.”
Economy Minister, Vaughan Gething, said: “In line with our Programme for Government commitments, the Development Bank of Wales is playing a successful role in raising awareness of the opportunities presented to business by equity investments, and in developing the market for equity in Wales.
“Just this month I have written to the Chair of the Development Bank setting out the policy priorities for this term of Government. That remit underlines the important role the Development Bank has to play in supporting the economic resilience and recovery mission which I outlined last month, and sets a clear ambition for its role in helping businesses transition to Net Zero.
“At a time when many mainstream lenders are retrenched, the Development Bank of Wales is there to help businesses access the finance they need to develop and grow – and help build a stronger, fairer, greener Welsh economy.”