Some £5.9bn of equity was invested in UK SMEs in 2017, according to the British Business Bank.
The Small Business Equity Tracker report revealed that total equity investment increased by 89%.
London accounted for 51% of all UK equity deals in 2017, with areas such as Edinburgh, Manchester and Bristol developing strong deal activity.
The 10 largest equity deals were equal to £1.7bn, which formed 28% of the market.
Total equity investment is now 50% higher than the previous peak in 2015, though investment declined in 2016.
Keith Morgan, CEO at British Business Bank, said: “After a weaker 2016, the UK’s SME equity finance market saw a record year of growth in 2017 with investment amounts soaring to £5.9bn.
“This is a clear sign of investor confidence in British smaller businesses and their potential for growth.”
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