Private equity and venture capital firms invested £4.3bn in West Midlands businesses over the past five years, with annual investment rising to £1.1bn in 2025, according to new research from UK Private Capital.
The findings, published in the Private Capital in the West Midlands 2026 report, show investment increased from £439m in 2024 to £1.1bn last year. Private capital firms currently back 503 portfolio companies across the region, supporting more than 172,000 jobs. These companies contribute £10.7bn to the West Midlands economy annually, according to the report.
Analysis by Henham Strategy found that West Midlands businesses backed by private capital were 20% more likely to achieve sustained annual revenue growth of more than 10% than companies without such backing.
Venture capital-backed businesses were also 60% more likely to be scaling internationally, while venture-backed firms were 2.7 times more likely to file patents than businesses without private capital investment.
The report also identified 90 active university spinouts across the region, with the University of Birmingham, University of Warwick, Coventry University and Aston University among the primary drivers of spinout activity.
UK Private Capital has called on the government to expand fiscal incentives for innovation-led investment, improve regional skills infrastructure and strengthen the conditions needed for long-term investment.
Michael Moore, chief executive of UK Private Capital, said: “The West Midlands has a strong and increasingly diverse population of businesses supported by private capital. From backing established businesses through buyouts to supporting innovative start-ups and scale-ups through venture capital, the industry is helping companies across the region grow, create jobs and contribute more to the economy.
“The region has real strengths in its business base, its universities and vibrant spinout ecosystems. With the right policy and regulatory environment, private capital can play an even greater role in helping the West Midlands build on those strengths and support the next generation of high-growth companies.”
