Equity investment in Scotland’s smaller businesses reached record levels in 2021, with Edinburgh named as the largest UK hub for deal activity outside of London.
The British Business Bank’s Small Business Equity Tracker found that £549m was invested in Scottish smaller businesses last year across 223 announced equity deals, with total investment up 74% compared to the previous 12 months.
Across the UK, deals were valued at £18.1bn in 2021, nearly double the total seen in 2020. However, the overall number of Scottish deals fell 19% from the previous year.
One-tenth of all the UK’s equity deals and a similar proportion (11%) of British Business Bank-backed investments over the past three years took place in Scotland – higher than the nation’s 6% share of the business population.
The bank said that the strong momentum has so far continued into the first quarter of 2022, with the volume of Scottish equity deals involving small businesses between January and March reaching £260m, despite economic headwinds causing uncertainty for many firms.
Further financial support for Scotland’s smaller businesses is set to be available next year, with the launch of the new Next Generation of Regional Funds, including a new £150m Scottish fund administered by the British Business Bank to further tackle geographical funding gaps.