Equity backed firms employ 8000 and turnover £1.5bn

Equity backed firms employ 8000 and turnover £1.5bn

The latest figures from the British Venture Capital Association show that equity backed Welsh businesses employ 8000 people and have a collective turnover of £1.5 billion.

Investment levels have doubled as the high growth technology sector in Wales attracts venture capitalists and corporate investors.

According to research by analyst Beauhurst, equity investments in Wales for the 2016/17 financial year were up by 30%, while there were more than 42 equity investments in 2017.

Over half of those deals involved the newly formed Development Bank of Wales, as a sole or co-investor.

Figures from the development bank show that investment levels have nearly doubled from £31 million in 2012/13 to £56 million in 2016/17.

This has been matched by a 1:1 ratio of private sector leverage with £600 million from private investment meaning a total of £1.1 billion has been invested in the Welsh economy since our launch as Finance Wales in 2001.

Those to benefit include customer experience technology firm Vizolution, named at number 259 in Deloitte Technology EMEA Fast 500, the Swansea-headquartered firm received an equity co-investment with the Development Bank of Wales and HSBC Ventures worth a total of £5 million.

Ore Adeyemi, managing director, HSBC Strategic Innovation Investments, said: “There are plenty of opportunities in Wales’ fast-growing technology sector and the success of Vizolution in expanding globally not only reinforces that message but also underlines why HSBC invested in it in 2016.”

“Vizolution shows that Wales offers a wealth of engineering and development talent and additionally, it is a great example of how a local business benefits from the support provided by government bodies.”

Cardiff-based Cloud IQ, which provides Conversation Rate Optimisation (CRO) e-commerce platforms raised £4m in July 2017 from a group of investors including the development bank and US ‘on-line payments’ giant PayPal.

Furthermore, the AIM-listed medical device company Creo Medical which has pioneered surgical endoscopy devices, received backing from Hoya-Pentax.

Rhian Elston, an investment director with the Development Bank of Wales, said: “New opportunities, new ventures and new partnerships are driving investment across Wales as we see increasing demand from corporate investors who are keen to capitalise on what we have to offer.

“In fact, our ambition is now to facilitate a further £1 billion investment in Wales in the next five years.

“Corporate and institutional investors are seeing Wales as a good place to do business. The infrastructure that's required to help start-up businesses get off the ground and begin to fly has taken a quantum leap forward in Wales in recent years.

“Private equity firm LDC's decision in 2016 to set up its first office in Wales, with a mandate of investing up to £100 million per deal in growth-focused SMEs and mid-sized businesses, gave a real boost to investor confidence.

“Our rapidly expanding technology sector is now proving to be of particular interest to investors. With over 80 businesses in our tech portfolio alone, there are dozens of exciting early-stage businesses already catching the eye of corporate investors and venture capital houses alike.”