A new £10 million pilot scheme has been launched by the Development Bank of Wales to help high growth Welsh businesses secure larger equity investment rounds and scale from a Welsh base.
The Wales Equity Co-investment Scheme will invest alongside qualifying institutional investors, providing matched equity investment of between £500,000 and £2 million in funding rounds of up to £10 million.
The scheme has been designed to unlock more third-party capital for Welsh SMEs with strong commercial growth potential, with a particular focus commercialising technology in businesses looking to scale.
By investing alongside experienced lead investors, the Development Bank will help increase the flow of institutional capital and sector specific expertise into Wales, providing businesses with the support that they need to accelerate growth, strengthen productivity and build long term value.
The £10 million pilot has been ring fenced from the Wales Flexible Investment Fund. The Development Bank will invest with the same financial and legal terms as the lead investor, helping to simplify the process for Welsh companies that are looking to access growth capital.
The scheme will be available to commercially viable, high growth Welsh SMEs. . Investment must be matched by an FCA registered lead investor whose funds are predominantly backed by private sector institutional capital.
Cabinet Member for Enterprise, Connectivity and Energy, Adam Price, said:
“Helping more Welsh businesses to scale is a key focus of our vision to unleash the full potential of our economy.
“Active capital of the sort provided through this important pilot scheme does more than just provide funding. It brings expertise, networks and long-term backing that can help businesses grow faster and improve productivity, supporting sustainable economic growth across Wales.
“This initiative also builds on the Development Bank's unique work supporting Welsh businesses and will strengthen the wider investment ecosystem in Wales.”
Hannah King, an Investor with the British Growth Fund (BGF). She said:
“Wales has a strong base of entrepreneurs that can benefit from initiatives that improve the funding environment. BGF has a long-standing commitment to backing ambitious Welsh businesses, and we've seen first-hand the value that investors can bring by working together.
“Our previous collaborations with the Development Bank of Wales, including investments in IQ Endoscopes and Ceryx Medical, demonstrate how co-investment can support companies as they scale. The Wales Equity Co-investment Scheme's ambition to bring more institutional capital into the Welsh market is an important step towards helping its growth businesses access the funding they need to scale, create quality jobs and compete internationally.”
Chris Griffiths, Technical Investment Director at the Development Bank of Wales added:
“The Wales Equity Co-investment Scheme is about helping ambitious Welsh businesses access larger equity rounds by bringing more institutional investment into Wales.
“By investing alongside experienced lead investors, we can help unlock third party capital, support high growth companies to scale and strengthen Wales's wider investment ecosystem. This pilot gives us a practical way to move faster while continuing to invest with commercial discipline.”
Since its launch in 2017, the Development Bank has invested more than £1.1 billion in over 4,500 Welsh businesses, supporting more than 55,000 jobs and leveraging over £680 million in co-investment.
