Investment in fast-growth Scottish businesses slows down in 2021

Amy Burnett, KPMG Private Enterprise Senior Manager in Scotland

VENTURE Capital (VC) investment in Scotland’s scale-up – or fast-growth – businesses slowed down in the first quarter of 2021, according to the latest figures from KPMG.

The latest KPMG Venture Pulse Survey reveals there were 21 VC deals in Scotland between January and March this year, down from 23 deals in the Q4 2020. Meanwhile the combined value was also down from at least £97.6 million to at least £64.3 million.

The data will come as a blow to the entrepreneurial scale-up sector, which bucked the wider economic downward trend last year, with record levels of investment and deals in Scotland.

But, with restrictions easing and the Scottish economy gradually re-opening, it’s hoped a return to high confidence levels from investors should see a return to the upward trend in the country’s increasingly important start-up and scale-up space.

The lion’s share of deals this quarter were in Glasgow (7), followed by Edinburgh (5) and Aberdeen (3).  

Commenting on the latest data, Amy Burnett, KPMG Private Enterprise in Scotland senior manager, said: “The figures for Q1 are relatively subdued and disappointing, but it’s clear investors still have an appetite for Scottish scale-ups.

“To some extent, we bucked the global trend towards the end of 2020, with significant deal volume and value, and we’re now seeing that steady off and balance itself out.

“Once again, the data demonstrates that investors are keen on Scotland’s increasingly key sectors – low-carbon energy, pharma and tech.

“For entrepreneurial business leaders, that provides a golden opportunity to adapt and embrace future opportunities. The country’s economy may be easing its way out of the pandemic, but we’re about to witness some radical transformation away from high carbon and heavy manufacturing. It’s the perfect time for the Scottish scale-up community to shine on the global VC stage.”

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