UK business investment up by 50%
Wide-scale disruption has been the one constant of the last 18 months, no more so than in UK businesses and industry. But if we are to 'build back better', then there needs to be a flexible funding infrastructure in place to support pandemic recovery.
Our research has shown that a drive for job creation is feeding demand for investment. Having analysed 12,708 fundraises in the last 24 months by industry, region and intended use of funds, and compared the figures of July 2020 - July 2021 with the same period 2019-20, we found that the UK experienced a 50% increase in investment gained in 12 months – an upsurge of £7.1bn.
Companies raising capital for investment had an average turnover of £22.2m and an average of 27 employees.
Investment for hiring
This upsurge has taken total business fundraising to £21b in the last 12 months, from £13.9b and the average fundraise from £2.19m to £3.56m. Despite the widespread closures of businesses, what is most astonishing is that across sectors and geographical regions, much of this investment has been used for hiring purposes.
The number of companies planning to use the investment for such purposes is up by 24% in the last 12 months. The investment for hiring purposes totalled some £1.68bn of investment, 8% of total funds raised.
Some regions demonstrated significantly higher figures of investment for jobs creation. In the West Midlands, investment raised for hiring increased by an astonishing 100% and in the South East 83%.
Retail businesses investment in hiring
And the trend has been noted in a wide range of sectors, companies classified as technology are up from 60.8% to 69%, while it may come as a surprise to hear that retail businesses raising funds to hire comprise 10% in the last 12 months compared to 8% in the previous year.
Leisure and Entertainment is up 7.4% from 5.6%. Industrials have seen a fall from 26.9% down to 21% of companies raising money to hire.
Of those companies raising money in the last 12 months with the intention of jobs creation, 35.5% were seed stage, 48% venture, 10.5% growth and 6 % established.
COVID-19 has had a massive impact on UK employment. As of May 2021, 4.8% of the population were unemployed. And the business community has responded by seeking investment to fund jobs creation. It’s vitally important that they receive the support that they need. Not just seed funding, which always has a market, but for growth, venture, and established organisations.
Without a flexible funding infrastructure, pandemic recovery could easily be hampered. Businesses need new talent not just to scale and diversify, but to re-establish following the disruptions of the last 18 months. Investors have real power to make a difference to the UK’s economic recovery and the health of the UK business ecosystem as we continue towards a post-COVID-19 environment.