Edinburgh named hotspot as equity investment in smaller firms hits record level

Equity investment in Scotland’s smaller businesses hit record levels last year, with Edinburgh named as the largest UK hub for deal activity outside of London, according to a new report.

Published today, the British Business Bank’s small business equity tracker found a total of £549 million was invested in smaller businesses north of the Border, across 223 announced equity deals, with total investment up 74 per cent compared to the previous 12 months.

Across the UK, deals were valued at £18.1 billion in 2021, nearly double the total seen in 2020. The overall number of Scottish deals fell, however, down 19 per cent from the previous year.

Analysis from the bank also included a review of the top UK hubs for equity investment over the past three years.

The Scottish capital achieved the top spot outside of London with an annual average of about £195m of equity investment. The business and professional services sector was the largest sector by number of deals in the city.

Glasgow featured among the top ten hubs, with a yearly average of £83m of investment placing the city in sixth spot.

Barry McCulloch, senior manager, UK network, Scotland at the British Business Bank, said: “Smaller businesses play a crucial role in Scotland’s economy and it is highly encouraging to see that 2021 was a record year for equity investment, particularly at a time when the impact of the pandemic was still being felt.

“While there were fewer deals than in 2021, the investment value increased significantly, indicating a smaller number of larger deals.”