Private capital – delivering growth in all parts of the UK

Supporting success

The UK is home to many successful businesses: start-ups making incredible advancements in their sectors, family-run businesses catering to their communities, and home-grown, high-street stalwarts employing thousands of people across the UK. Behind many of these businesses is private capital – an industry that directly supports 2 million jobs nationwide - 6% of all jobs in the UK. In 2021 alone, over 1,300 UK companies were supported by the British Private Equity and Venture Capital Association’s members, receiving more than £17bn in funding, with 66% of these businesses outside London.

This is record funding for private capital in the UK - proof that private capital is driving economic growth.

Innovating across the West Midlands

The West Midlands is emerging as a hub for private equity (PE) and venture capital (VC) investment. It is home to exciting and innovative companies of all sizes and talented people eager to innovate. In 2021 alone, 65 companies across the West Midlands saw £355m of investment from BVCA members – with the majority of them in the tech sector.

But the support does not stop there. Private capital works in partnership with founders and entrepreneurial management teams, providing the hands-on expertise and long-term approach that enables companies to innovate, grow, and create jobs. Of the 2 million total jobs supported by PE and VC, 127,000 of them are across the West Midlands – 7% of all jobs backed by the industry.

These are companies like Solihull’s Correla, backed by NorthEdge, which provides sustainability-focused software and services to the energy sector. Its Data Discovery Platform supports accelerated adoption of smart meters, electric vehicle charge points and heat pumps – enabling the UK to decarbonise. There’s Birmingham’s NEC Group, too, which alongside its private equity owner, Blackstone, recently unveiled its redevelopment masterplan – due to create 5,000 new homes, an estimated 3,500 new jobs, a new primary school, a greener and more sustainable environment on the NEC Campus, and thousands of square meters of commercial and outdoor event space. As these examples highlight, private equity and venture capital firms cover the last mile between UK financial services and the real economy, in every part of our country – they are invested in growth, innovation and people. And through active ownership of businesses, they deliver long term growth, which is not only good for the private capital funds and their investors, but local, regional and national economies too.

Science and tech superpower

9 in 10 UK businesses supported by private capital in the UK are SMEs. Companies at their earliest stages will find backing from venture capital; a driving force behind thousands of UK start-ups. In 2021 alone, BVCA VC members invested almost £1.8bn into 650 start-ups and small businesses. These businesses are often in technology sectors such as cyber security and SaaS (software as a service), but also in R&D intensive sectors like life sciences and deeptech (next generation technology). These not only drive our economic growth, but address prominent societal challenges, like climate change, or exciting advances in medical science. This combination - of entrepreneurial, small companies and VC funding - will cement the UK’s position as a science and tech superpower on the global stage.

This investment is nationwide, with cities such as Birmingham, Manchester, Edinburgh and Belfast emerging as hotspots for venture capital firms to find innovative companies to support. There’s also a distinct correlation between VC investment and the UK’s worldclass universities, with many start-ups beginning life as pioneering research projects that need a helping hand in commercialising and coming to market.

Private capital at work

It’s clear that private equity and venture capital are at work across the UK, backing individuals and communities to innovate, flourish and grow.

If you’d like to find out more about how the industry is supporting your nation, region or constituency, please contact ExternalAffairs@bvca.co.uk