Summary
UK equity investment into smaller businesses fell 4% to £12.3bn in 2025, with seed deals down 27% and venture deals down 13%, according to the British Business Bank. AI companies attracted 44% of all investment while the ten largest fundraises accounted for 23% of total capital. The North West bucked the national trend with an 82% regional increase, but this was driven by a small number of large AI and energy deals.
The exit market remains strained: 54% of UK fund managers surveyed describe conditions as poor or very poor, with exits taking a median of four years and the number of annual exits stuck at 400–500 despite equity investment more than doubling between 2017 and 2021. Slower exits mean slower returns to investors, making funds more selective about new investments and harder to raise from.
Manchester and the North West face a particular challenge in growth-stage capital. Outside London, growth-stage deal numbers fell 12% between 2023 and 2024 while investment value fell 24%. Bank of England interest rate rises are expected to raise the cost of capital further, compress valuations, and push investors toward profitability over growth, making early-stage fundraising harder for companies building the pipeline behind headline successes like Manchester PropTech Street Group's £200m exit.
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This is a summary written for the Manchester Business Services register. The full article belongs to Manchester Digital — read it at source.
Common questions
- What is this article about?
- While North West equity investment jumped 82% in 2025, the market is becoming polarised, with capital concentrating in a small number of AI companies and exits proving difficult. Rising interest rates and selective investor behaviour are expected to compress valuations and lengthen fundraising cycles across the region.
- When was this published?
- This article was published on 25 September 2026.
- Who published this article?
- This article was published by Manchester Digital.