Figures released by the Development Bank of Wales today show a 97% growth in equity investments from £11.6 million in 2021/22 to a record figure of £22.9 million in 2022/23, £10.9 million of which was for 31 different technology ventures.
In a challenging economic context, which saw CPI at 10.1% in the 12 months to March 2023, businesses in Wales accessed 516 individual equity and debt investments totalling £124.2 million in 2022/23 through the Development Bank. Private sector co-investment of £114.5 million represented a ratio of 1:0.92* and the average deal size grew by 14% to £240,748.
Other highlights of 2022/23 include:
• Equity and debt totaling £20.55 million to finance succession deals for 44 different businesses
• £9.9 million for 320 micro loans of up to £50,000
• 2,552 jobs created and 2,117 jobs safeguarded
• £19.25 million investment in 114 young entrepreneurs – including investment into a company with a director aged 17 years
• £7.8 million awarded to tourism businesses from the Wales Tourism Fund
• Investors registered with Angels Invest Wales rose to 334, with 102 individuals having made angel investments during the year
The commercial property sector also saw significant growth, with funding for 71,882 square feet of new premises. Investments totaling £6.67 million from the Commercial Property Fund represented almost double the investment made in 2021/22.
Two new products were launched during the financial year, both a key part of the Development Bank’s commitment to helping new and existing customers to address decarbonisation, reduce their energy consumption and drive the low carbon agenda. The £10 million Green Business Loan Scheme received 25 new enquiries in the first month alone while the launch of the £33 million Green Homes Incentive in July 2022 gives new home developers a reduction in loan fees of up to 2% subject to a qualifying criteria.
Welcoming the strong performance, Economy Minister Vaughan Gething said:
“The Development Bank of Wales is going from strength to strength in providing innovative, responsive support that businesses need now more than ever.
“Across a year when economic conditions and uncertainties led many high street lenders to be more risk averse, retrenching their positions, the Development Bank has helped keep a vital flow of accessible finance available to businesses right across Wales.
“The Welsh Government took bold action in creating the UK’s first regional bank with a service that is able to act at scale while understanding the needs of the Welsh economy.
“The broad suite of funds offered by the Development Bank of Wales has helped hundreds of businesses leverage investment and secure the funding they need to invest and grow, and I would encourage businesses to consider whether the bank could support their next steps.”
Chair of the Development Bank of Wales, Gareth Bullock said: Against a backdrop of rising inflation, economic uncertainty and significant cost of living pressures, we entered the year more determined than ever to ensure that we had the funding and the firepower necessary to meet customer demand.
“I am pleased that we have continued to grow overall investment levels, supporting a broad range of businesses across the nation and playing our part in making sure that ambitious businesses can access the investment they need. We will maintain that focus on delivery in the coming year, working together with our stakeholders in the Welsh ecosystem to support people, businesses and communities across Wales”
Chief Executive of the Development Bank, Giles Thorley said: “As one of the most active venture capital investors in the UK, we’ve continued to work with the private sector and new funds entering the market to maximise the value for Wales. We have also put significant effort into promoting equity as being a key enabler of business growth. It plays an important role in the complete life cycle from seed and early- stage investment through to established, privately-owned businesses looking to fund succession and exit. Indeed, over £20 million was invested in succession deals during the year, retaining wealth and goodwill in Wales.
“2022/23 has also seen us further grow our role as a responsible investor, evolving our decision-making processes to increasingly focus on environmental, social and governance factors. We’ve signed up to the world’s largest voluntary corporate sustainability initiative, Principles for Responsible Investment (PRI) and launched two new products that are already helping fund Welsh businesses to reduce their carbon emissions and embrace the journey to net zero as part of our commitment to promoting and advancing a green future in Wales.
“We’ve delivered a creditable performance for Wales in the last year and will continue to focus on maintaining the support for the long-term sustainability of the Welsh economy.”
*The private sector co-investment figure of £114.5 million includes three particularly large deals with a £32.3 million funding package for Creo Medical, £10.8 million for QLM and £12 million for Coin Cover.