- Business as usual (BAU) investment totalled £105.6 million in both debt and equity
- BAU activity leveraged £60 million from the private sector
- An additional £92 million in loans supported businesses through the Covid-19 Wales Business Loan Scheme, safeguarding over 16,000 jobs
- Total invested in the 2020/21 financial year was £197.6 million
- Over 2,000 jobs created and 1,200 safeguarded from BAU activity
- £48.8 million of property development loans arranged, up 43% from 2019/20 where £34.1 million was invested
- £7.5 million invested in start-up businesses across 122 investments, an increase of 32% of funding in 67% more businesses from 2019/20
In a year dominated by Covid-19 and Brexit, the Development Bank of Wales has worked with and supported a broad range of businesses across the Welsh economy to help them survive, recover and grow during extremely difficult times.
In total, the Development Bank invested £197.6 million in the 2020/21 financial year. Whilst £92 million in loans came from the Covid-19 Wales Business Loan Scheme (CWBLS) to support companies through the pandemic, investments from all our BAU funds also remained stable. £105.6 million provided a range of support for businesses across all areas of the economy and all stages of growth.
Compared to the 2019/20 financial year, there was a small increase of £2 million in BAU funding across 402 investments compared to 457 investments in 2019/20. There were 236 micro loans, which made up 59% of the Development Bank’s investment volumes. The amount leveraged from the private sector reduced to £60 million from £75.9 million in 2019/20 with the increase in property development loans, which attract a lower level of private sector investment a contributing factor.
Investments were well geographically distributed with £25 million invested in North Wales, £31 million in Mid and West Wales and £49.6 million across South Wales.
Average deal size increased for micro loans and property development, moving from £23,500 to £32,300 and £655,800 to £1.3 million respectively.
Property development continued to be a strong growth area for the Development Bank. The property team completed £48.8 million of loans across 37 property development investments, an increase of 43% supporting 402 new homes and 70,892sqft of commercial space.
Giles Thorley, Chief Executive of the Development Bank of Wales, said: “The 2020/21 financial year has been like no other in living memory. Covid-19 has had a deep impact on all sectors of society and all businesses. From managing the Welsh Government’s Covid-19 Wales Business Loan Scheme and supporting those impacted by lockdown restrictions, to backing entrepreneurs taking the plunge into starting a business as well as financing companies who have found ways to adapt their business models – this last year has been busy and transformative for the Welsh business economy. This includes the Development Bank of Wales itself, with colleagues making the switch to homeworking in spring 2020.
“What we have seen is that Welsh businesses and entrepreneurs are resilient. Many finding ways to work through the pandemic, others totally changing their business or starting something entirely fresh. It’s our job to provide broad support. We’re a generalist investor and work across most sectors and all growth stages.”
Another growth area for the Development Bank was start-up funding. According to research from Economic Intelligence Wales, there was a 103% increase in the number of start-ups across Wales in the final quarter of 2020/21. This was reflected by Development Bank of Wales’s customers with 122 start-up investments in the financial year compared to 73 in 2019/20 (an increase of 67%). Of those start-up investments, 85 were micro loans.
The technology ventures team invested £9.4 million of equity funding across 31 investments, leveraging an additional £17.4 million from co-investors. This was supported by a greater collaboration between Angels Invest Wales and technology ventures. In total, the Angels Invest Wales team helped facilitate £2.6 million in business angel investment over the financial year.
During the year the Development Bank exited four companies. This included ALS People which bought back its equity shareholding and Glamorgan Telecom which was acquired by Onecom.
Economy Minister, Vaughan Gething said: “The last year has been incredibly tough for Welsh businesses. Throughout the Covid pandemic, the Welsh Government’s priority has been to protect lives and livelihoods.
“Welsh businesses have been fighting to survive in this crisis, with so many making huge personal sacrifices to make it through. But the Welsh Government has worked hard to support businesses across Wales; we’ve pulled every lever we can to back them – including working with the Development Bank of Wales, supporting them to deliver what was a rapid and well received response to the Covid emergency which directly helped safeguard 16,000 jobs across Wales.
“The Development Bank of Wales is a key element of the Welsh Government’s support for Welsh business, and its investment of £200 million in Welsh businesses over the last year has helped to launch new businesses, create new jobs, safeguard existing jobs, and provide the support necessary to help transform commercial property into places our businesses need to grow and thrive.
“As we build a bridge to a strong Welsh recovery, we will stand by Welsh businesses and workers, providing the best possible support, tailored to our needs and wedded to our values. Our priority now is to kick-start a strong Welsh recovery. Our ambitious recovery plans will ensure there is no lost generation in a Wales that becomes an engine for sustainable, inclusive growth.”
Gareth Bullock, Chair of the Development Bank of Wales, said: “The Welsh Government’s capitalisation of the Development Bank through their extension of the Wales Flexible Investment Fund up to £500 million ensures that we can support businesses for many years to come. Our role is to take a longer term view, especially in light of what has been a difficult year for many. As restrictions ease, and we start to pull out of the pandemic it’s important for us to look to ways to support business and the economy.
“As well as being a generalist funder, able to plug the gaps in the market left by the private sector, we believe in offering patient capital; be that through equity investments, longer term loans, or follow-on funding through our portfolio teams. We’re here to help Wales grow and prosper.”