Barclays' latest Regional Investment Map reveals a shift in capital dynamics for UK startups and scale-ups. The first quarter of 2025 saw the formation of 213,000 new companies, despite declining equity investment and grant funding. Nine out of twelve UK regions experienced an increase in debt finance from Q1 2024 to Q1 2025, with high-growth businesses registering a 7.86% average increase in bank loans and overdrafts.
The Barclays Business Prosperity Fund offers £22 billion for refinancing existing facilities and new lending to support business growth among new and existing Business Banking customers and UK Corporate Banking clients.
"Q1 often sees a seasonal rise in new businesses opening, fuelled by new year ambitions," said Abdul Qureshi, MD, Business Banking at Barclays. "Nevertheless, these figures are a positive sign that entrepreneurs continue to have the confidence to take risks and start new ventures in the UK."
Despite the upsurge in new firms, equity investment activity decreased by an average of 7.27% from Q4 2024 to Q1 2025. However, some regions defied this trend: Wales saw a significant uplift due to a £600 million offshore energy deal accounting for most of its increase; Yorkshire and the Humber secured £42 million between January and March 2025—a rise of over 72%.
In terms of spinouts from academic institutions, London and the South East maintained leading positions with 290 and 276 respectively.
All UK regions saw an increase in new business incorporations except Northern Ireland, which fell slightly by -2.07%. The North East recorded the largest percentage increase with a rise of over 24%, followed by Scotland (22.7%) and Yorkshire and the Humber (19.7%).
Grant funding declined across most regions with a drop of 15.4%, but London recorded an exceptional increase due to £45.4 million awarded in grants during Q1.
To learn more about business insights or apply for funding through Barclays' initiatives like their Business Prosperity Fund, visit home.barclays/BusinessProsperity.