Wales Bucks the Trend as Equity Deals Rise 7.2% Amid UK-Wide Investment Decline
UK-wide there were declines in both deal numbers and investment values. Wales stood out as one of only five UK nations and regions to experience growth in equity deal numbers, recording a 7.2% increase compared to 2023, which the bank said demonstrates resilience amid a more cautious investment climate. This contrasts with the broader UK market, which saw a 15.1% drop in equity deal activity.
Despite the increase in deal numbers, the total value of equity investments in Wales declined by 12.1% to £113 million.
In related news, the Investment Fund for Wales (IFW) recently reported progress on its £50 million equity fund. Since its launch in late 2023, £18 million has been deployed, attracting an additional £3.1 million in private co-investment. As fund managers Foresight continue to build their deal pipeline throughout 2025, both the number and value of equity deals in Wales are projected to rise significantly, helping to strengthen the Welsh equity market.
The average size of artificial intelligence (AI) equity deals significantly outpaced those in the broader UK market in 2024, highlighting the sector's sustained investor appeal.
Across the UK, the average AI equity deal was £8.3 million – more than 40% larger than the £5.7 million average deal size in the wider market. At the growth stage, AI deals were even more substantial, averaging £36.3 million, 2.5 times larger than comparable deals outside the sector, underscoring strong investor appetite driving high valuations.
In Wales, the Investment Fund for Wales (IFW) recently partnered with the Development Bank of Wales to invest in Nisien.AI, a pioneering AI start-up and Cardiff University spin-out. Nisien.AI leverages advanced AI technology to detect and respond to online harms, such as digital conflict, and is already collaborating with the world's top five social media platforms.
This new investment will support key hires and accelerate research and development, enabling Nisien.AI to bring new products to market, helping to position them at the forefront of digital safety innovation.
Susan Nightingale, UK Network Director, Wales at the British Business Bank, said:
'2024 was a challenging year for the UK equity finance market. Nevertheless, in Wales resilience is being demonstrated with a rise in deal numbers, although a continued drop in overall deal values reveals the ongoing challenges within the Welsh equity market.
'It is encouraging to see that the appetite for AI is driving value across the UK equity finance market with large deal sizes. There are a number of ambitious AI companies in Wales, like the Investment Fund for Wales backed Nisein.AI, and others like them, who are looking to scale with a view to becoming major players within the transformational AI sector.
'It is our hope that among them we will discover Wales' first unicorn. To date British Business Bank equity programmes have supported 56% of UK unicorns, and it is our job to help create the ecosystem that will allow the Welsh unicorn scene to emerge and prosper.'
The UK is a global leader in research and development, home to four of the world's top 10 universities. In Wales, Swansea University leads the way in generating spinout companies, with this position reaffirmed in Beauhurst's fifth annual Spotlight on Spinouts report published in March, which highlighted Swansea's impressive track record – with 58 spinouts launched since 2011, ranking it ninth in the UK and first in Wales.
In 2024, university spinouts across the UK raised £1.9 billion in equity investment, representing 17% of total investment in the country and accounting for a record 12% of total deals. Spinout companies are a vital bridge between academic innovation and market deployment, and the British Business Bank supports these ventures more than the overall equity market.
Business angels continue to be a significant source of equity investment for start-up and early stage businesses with 70% of angels investing in early-stage businesses. The Small Business Equity Tracker found that two-thirds (64%) of respondents to the Bank's survey of UK angel investors have matched or increased their investments from 2023 to 2024.
To boost the work of the bank's established Regional Angels Programme, in 2023 it launched the Female-led Angel Syndication Pilot, to support and accelerate the development of female-led angel syndicates across the devolved nations.
A notable example is the Women Angels of Wales (WAW), supported by the British Business Bank and the Development Bank of Wales. Since its mid-2023 inception, WAW has onboarded over 20 angels and closed deals totalling £3.8 million.
One of WAW's standout 2024 co-investments was into Kaydiar, a Cardiff Metropolitan University spin-out specialising in innovative medical devices, including orthotic solutions and prosthetic support technologies that address essential healthcare needs.
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