Newly released HMRC figures have shown that 2,795 companies raised a total of £1,563 million of funds under the EIS scheme in 2013-14.

In 2012-13, 2,470 companies raised £1,033 million of funds, according to the official report.

Revised data for 2013-14 showed that companies raising funds for the first time under the scheme raised a total of £872 million (revised from £840m previously) compared with £576 million in 2012-13.

Since EIS was launched in 1993-94, over 22,900 individual companies have received investment through the scheme, and over £12.3 billion of funds have been raised, HMRC stated.

John Thorpe, Business Line Manager for EIS at Octopus Investments, said: “The figures from HMRC show the increasing appeal of the Enterprise Investment Scheme as part of a well-balanced investment portfolio.

“With legislation soon to come into force to further restrict the annual and lifetime pension allowances, we believe EIS will become increasingly attractive to thousands of investors who are prepared to accept the high risks associated with smaller company investment.

“Indeed we believe that investor demand may outstrip supply this year.”

He said Octopus had helped support smaller businesses which have gone on to become household names such as Graze and Zoopla Property Group showing what a critical source of funding it can be.

The HMRC report stated: “The number of companies raising funds peaked at 3,315 in 2000-01, but the amount raised in 2013-14 (£1,563 million) far surpasses the previous peak in the amount of funds raised (£1,065 million in 2000-01).

“The majority of investment through the scheme (58%) since the inception of EIS was investment into companies raising EIS funds for the first time.

“The exception to this was 2005-06 when a slightly higher proportion of EIS investment was into already established companies (53%). The proportion of funding raised in 2013-14 by companies using EIS for the first time was 56% (revised from 53% previously).”

Seed Enterprise Investment Scheme statistics were also reported.
Since SEIS was launched in 2012-13, over 2,900 individual companies have received investment through the scheme and over £250 million in investment has been raised, according to the report.

In 2013-14, revised figures showed that over 2,000 companies received investment through the Seed Enterprise Investment Scheme and £168 million of funds were raised (revised from £164m previously).

Over 1,750 of these companies were raising funds under SEIS for the first time, raising a total of £152 million in investment. The average investment per company under SEIS in 2013-14 was over £81,000.