Private capital invests £4.3bn into businesses across the West Midlands over the past five years
New research shows that private equity and venture capital firms invested £4.3bn into businesses in the West Midlands over the last five years.
The report, Private Capital in the West Midlands 2026, which will be launched by UK Private Capital at an event taking place in Birmingham in partnership with Gallagher, highlights the industry’s importance to the region’s economy. Private capital firms invested £1.1bn in the region in 2025, a significant increase from the £439m invested in 2024, taking the cumulative overall figure of investment over the past 5 years into business in the region by private capital to £4.3bn.
Private equity and venture capital firms currently back 503 businesses across the West Midlands, supporting over 172,000 jobs. Private equity typically invests in established businesses to help accelerate growth and improve performance, while venture capital provides funding to earlier-stage, high-growth companies to help them scale up. Businesses backed by the industry contribute £10.7bn to the region’s GDP annually.
Supporting business growth trajectory
Analysis conducted by Henham Strategy for the report, shows that businesses backed by private capital in the West Midlands are more likely to deliver sustained growth, internationalise and innovate than the wider business population:
- West Midlands companies that receive private capital backing are 20% more likely to also deliver sustained annualised revenue growth above 10% per year than firms without private capital backing.
- Venture-backed firms are more outward looking. West Midlands-backed businesses are 60% more likely to also be internationalised than those not backed by VCs, which could indicate earlier access to export markets and the investor networks that can help businesses expand overseas.
- Innovative businesses often seek to protect and commercialise their intellectual property. West Midlands venture-backed firms are also 2.7x more likely to file patents than businesses not-backed by the industry
The West Midlands’ vibrant spinout ecosystem
The report provides an in-depth look at the West Midlands spinout ecosystem – companies created based on intellectual property generated through university research. Data provided by Beauhurst for the report shows that the West Midlands boasts 90 active spinouts.
The University of Birmingham, University of Warwick, Coventry University and Aston University are responsible for the lion’s share of spinouts in the region, helping to generate investable businesses in deep tech and biotechnology. The majority of spinouts within the region are located in Birmingham, with Coventry close behind and the rest spread across the region’s Local Authorities.
Active Spinouts by Local Authority:
| Local Authority | Active Spinouts | |
|---|---|---|
| Birmingham | 37 | |
| Coventry | 30 | |
| Warwick | 4 | |
| Dudley | 3 | |
| Walsall | 3 | |
| Solihull | 2 | |
| Wolverhampton | 2 | |
| Herefordshire, County of | 1 | |
| Nuneaton and Bedworth | 1 | |
| Redditch | 1 | |
| Rugby | 1 | |
| Sandwell | 1 | |
| Stratford-on-Avon | 1 | |
| Telford and Wrekin | 1 | |
| Wychavon | 1 | |
| Wyre Forest | 1 |
The report will be launched at the Midlands Invest Forum, which brings together investors from leading private equity and venture capital firms, local institutional investors, policymakers, and portfolio companies to explore the Midlands’ growing strengths, emerging opportunities and strategic priorities.
The report makes several recommendations to both national and regional policymakers about how the impact of private capital can be maximised across the region. This includes calling on:
- UK government to scale programmes such as Innovate UK’s Investor Partnerships, Growth Catalyst initiatives and Knowledge Transfer Partnerships that help spinouts and innovation-led businesses access capital.
- The British Business Bank to ensure it catalyses competitive investment ecosystems across the UK, both through its regional angel funds, regional funds and wider programmes.
- UK government seek to further improve regional skills infrastructure, in partnership with industry and Skills England.
- Combined authorities and local leaders to provide clearer investment signals and improve planning and infrastructure conditions that support long-term growth.