The British Business Bank has published its latest annual Small Business Equity Tacker
John Atack and Simon Ward of Draig Therapeutics.
Wales has experienced the biggest percentage fall in equity deals in the UK while their combined value have increased marginally, show new research from the British Business Bank.
According to its Small Business Equity Tracker 2026 the value of equity investments in Wales last increased 1% on 2024 to £152m.
One deal, the £107m raised by Cardiff University life sciences spinout Draig Therapeutics accounted, for 70% of the total. The research from the UK Government’s economic development bank also shows that Wales and parts of the north of England under-performed on their share of university spinouts.
While Wales accounted for 7% of incorporated spinouts, only 3% of those receiving investment. Wales experienced the biggest percentage fall of equity deals of any UK nation or region, down 45% to 44. Only Northern Ireland had fewer deals with 35.
For the UK as a whole deals were down 17% to 2,002 with their total value down 4% to £12.28bn. On value Wales made up just over 1% of the UK total and on number of deals 2.2%
Across the UK, equity markets remained challenging in 2025 with investors increasingly concentrating capital into fewer, larger transactions. London’s dominance continued to ease as investment fell, while Scotland, the South West and the North West all recorded strong growth in investment value.
Across the UK, AI companies accounted for a record 44% of smaller business equity investment in 2025 and 26% of all deals, with investment increasing by 48% year-on-year to £5.4bn across 527 deals.
In Wales, AI businesses raised £5.6m across eight deals in 2025, accounting for 18% of all equity deals. While investment activity remains at an earlier stage than in some parts of the UK, AI continues to represent an important area of innovation, with Welsh businesses increasingly attracting backing to develop new technologies.
Recent examples supported by the British Business Bank’s £130m Investment Fund for Wales – whose equity element is fund managed by Foresight – include Cardiff-based automation company Bots for That, which secured a £1.5m equity investment to support growth of its AI-powered software platform, and Cardiff University spinout Nisien.AI, which received backing to accelerate research and development, expand its workforce and bring new products to market.
Jessica Phillips-Harris, director, Wales, British Business Bank local growth team, said: “Equity investment in Wales was resilient in the face of a challenging year in 2025, demonstrating that investors continue to back ambitious Welsh businesses with strong growth potential.
“Artificial intelligence is becoming an increasingly important driver of investment activity across the UK, and Wales is benefitting through innovative businesses developing new technologies and attracting investor interest. At the same time, strong investment into sectors such as life sciences demonstrates the breadth of innovation taking place across Wales.”
