Yorkshire and The Humber businesses saw equity deal activity increase in 2025 despite a decline in overall investment value, according to the British Business Bank’s annual Small Business Equity Tracker.

Throughout 2025, Yorkshire and The Humber businesses completed 89 equity deals, up 13% compared to 2024 and making it one of only two UK Nations and regions to record growth in deal volumes, alongside Northern Ireland. However, total equity investment fell by 41% over the same period to £183m, indicating a shift towards smaller transactions in the region, in contrast to other parts of the UK.

The North of England overall made up 12% of the UK’s total equity investment value, rising from 9% in 2024, as London’s dominance waned.

AI deals continued to dominate across the UK, while funding conditions tighten elsewhere. AI companies accounted for 44% of total equity investment into smaller businesses in 2025, the highest share on record. AI also represented more than a quarter (26%) of all deals, nearly doubling its share since 2022. Investment in AI-related deals rose by 48% year-on-year, highlighting strong investor appetite.

British Business Bank accelerates investment activity

The British Business Bank supported 15% of smaller business equity deals and 16% of investment between 2023 and 2025, with activity concentrated at early stage where market declines have been most pronounced. Key initiatives like the Northern Powerhouse Investment Fund II (NPIF II) continue to direct equity investment into businesses across the region. This includes Leeds based eco-friendly cleaning brand OceanSaver, who secured equity investment to expand its range and target other retailers.

The Bank has accelerated its pace of investment following the publication of its Five-Year Strategic Plan in November 2025. By increasing our annual deployment by two-thirds, we are unlocking around £26bn of private capital alongside £13bn of our funding over the next five years. The Bank is also deploying £4bn to boost the most promising businesses in the government’s eight Industrial Strategy sectors.

Cat Smith, Director, Yorkshire and Humber, British Business Bank Local Growth Team: “After a slower year for the UK’s smaller business equity market, it’s particularly encouraging to see Yorkshire and the Humber outperform 2024 in terms of numbers of deals, ensuring more businesses can access the capital they need to scale and grow from our regional hub. We need to ensure that businesses here can tap the larger size of deals that other areas of the UK are seeing, all of which is essential for our region’s businesses to remain competitive.

“Through our own activity at the Bank, we’re ensuring that we play an active role in the equity investment eco-system, whether that’s through supporting angel syndicates, boosting innovation clusters, or through our own direct activity with NPIF II. This is about supporting businesses in typically underrepresented areas, while helping to crowd in millions in private sector co-investment that businesses may otherwise struggle to access.”