Wales recorded the steepest percentage decline in equity deals among all UK nations and regions in 2025, even as the total value of investments increased marginally, according to the British Business Bank's Small Business Equity Tracker 2026. The number of equity deals in Wales fell by 45% to just 44, with only Northern Ireland reporting fewer deals at 35.
Value rises slightly despite deal slump
The total value of equity investments in Wales rose by 1% compared to 2024, reaching £152 million. However, this figure was heavily influenced by a single transaction: Cardiff University life sciences spinout Draig Therapeutics raised £107 million, accounting for 70% of the total Welsh equity investment value. Wales contributed just over 1% of the UK's total equity value and 2.2% of the number of deals.
University spinouts underperform
The research also highlighted that Wales and parts of northern England underperformed in their share of university spinouts. While Wales accounted for 7% of all incorporated spinouts in the UK, only 3% of those receiving investment were based in Wales.
UK-wide trends: concentration and AI dominance
Across the UK, equity markets remained challenging in 2025, with investors increasingly concentrating capital into fewer, larger transactions. The total number of UK equity deals fell by 17% to 2,002, and their combined value dropped by 4% to £12.28 billion. 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.
Artificial intelligence (AI) companies accounted for a record 44% of smaller business equity investment in 2025 and 26% of all deals. AI investment increased by 48% year-on-year to £5.4 billion across 527 deals. In Wales, AI businesses raised £5.6 million across eight deals in 2025, representing 18% of all equity deals in the nation.
Welsh AI and life sciences examples
Recent examples supported by the British Business Bank's £130 million Investment Fund for Wales include Cardiff-based automation company Bots for That, which secured a £1.5 million equity investment for 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 of the British Business Bank's local growth team in Wales, 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.”
