Why Scotland has seen a 74% surge in equity investment value as UK falters
“Scotland’s performance in 2025 is a real positive in what has been a challenging year for the UK equity market” – Mark Sterritt, British Business Bank
Scotland saw a 74 per cent surge in equity investment value last year in a “real positive” for the country, defying a UK-wide picture where overall equity funding into smaller businesses dipped 4 per cent, new research has revealed.
Publishing its latest annual Small Business Equity Tracker, the British Business Bank said Scotland had attracted “significantly higher” levels of investment despite a decline in overall deal numbers, as a smaller number of larger transactions underpinned growth.
London’s traditional dominance declined again in 2025, with the UK capital’s share of equity investment falling from 60 per cent to 57 per cent. Against this backdrop, Scotland was among the strongest-performing nations and regions of the UK, alongside the south west and north west of England.
Scotland also surpassed London in the number of university spinout deals.
Mark Sterritt, managing director, British Business Bank local growth team, said: “Scotland’s performance in 2025 is a real positive in what has been a challenging year for the UK equity market. The increase in investment value reflects the strength of Scotland’s businesses and its innovation base, particularly in sectors such as energy, where the country has clear competitive advantages.
“The continued resilience of Scotland’s spinout ecosystem is especially encouraging, highlighting the strength of its universities and their ability to translate cutting-edge research into high-growth companies.”
He added: “We know that access to finance remains critical, particularly for early-stage businesses navigating tougher market conditions, which is why the Investment Fund for Scotland plays such an important role in helping ambitious ventures across the country access the finance they need to start and scale.”
Overall, the number of equity deals in Scotland fell in 2025, reflecting tighter funding conditions seen across the wider UK market. However, the British Business Bank said the increase in investment value highlighted continued investor confidence in Scotland’s strongest sectors and innovation clusters.
University spinouts also proved more resilient within Scotland’s wider equity ecosystem than in the rest of the UK. Scotland surpassed London in the number of spinout deals completed (45 versus 28), with the University of Edinburgh emerging as Scotland’s most active spinout institution. It completed 16 deals in 2025 and ranked among the top three universities in the UK by spinout deal volume.
Scotland benefits from the British Business Bank’s dedicated £150 million Investment Fund for Scotland, which offers a range of finance options, including small loans from £25,000 and equity investment of up to £5m.
The British Business Bank said it had accelerated its pace of investment following the publication of its five-year strategic plan in November. By increasing its annual deployment by two-thirds, it is unlocking some £26 billion of private capital alongside £13bn of its own funding over the next five years.
The bank is also deploying £4bn to support the most promising businesses in the UK government’s eight industrial strategy sectors.
The British Business Bank was established in 2014 and acts as the UK government’s economic development bank. Its mission is to drive economic growth by helping smaller businesses get the finance they need to “start, scale and stay in the UK”.
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