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EIS investment into startups hits £2.5bn all time high

The latest figures from HMRC show more private investors than ever are backing startups with their cash.

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Pexels/Teona Swift

Retail investors in the UK ploughed £2.5bn into startup companies through the  Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) last year, according to data from HM Revenue & Customs (HMRC).

This represented a 39 per cent jump in the case of EIS compared to the previous year and 16 per cent jump for SEIS for the 2021 - 22 tax year.

Set up in 1994, EIS & SEIS Investments are available to certain companies and offer investors generous income tax deductions between 30 and 50 per cent if held for four years. 

In total £30bn of private investors’ cash has been raised by 53,000 companies over this period including hundreds of well known fintech companies.

London and the South East was the UK region that saw the majority of investment drawn from but investors are increasing in number in other regions more quickly. 

The South West saw an 87 per cent rate of growth compared to the previous year. Scotland and the West Midlands also saw increases of 61 per cent and 54 per cent, respectively.

“These figures demonstrate the continued success of the EIS and SEIS in driving innovation and entrepreneurship across the UK by encouraging investment in small and early-stage businesses. It is fantastic to see such significant growth in investment across the regions and devolved nations and this has been a key priority for EISA,” said  Christiana Stewart-Lockhart, Director General of the EIS Association.

“In particular, the growth in the South West is very encouraging. We are delighted to see more and more entrepreneurs securing the much needed investment through these schemes, which will help to drive economic growth and create jobs in all areas of the UK,” she said.

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