Research shows rise in equity investment for Scottish businesses

Kerry Sharp (Scottish Enterprise Director of Growth Investments)

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NEW research published today by Scottish Enterprise (SE), 11 July 2022, reveals equity investment secured by Scottish businesses increased 36% to £690 million in 2021, up from £509 million in 2020.

Based on Beauhurst data, the research looks at the performance of the Scottish equity investment market and compares with the other nations and regions of the UK.

The 2021 Risk Capital Market report confirms that Scotland’s vibrant investment market is amongst the best performing across the nations and regions of the UK. Scotland is placed in the next best performing quartile outside of the ‘Golden Triangle’ of London, the South-East and East of England, for both deal numbers and amount raised.

Strong growth was seen in the early stages in the under £10 million deal bracket, in addition to an increase in the number of Scottish companies raising larger investment rounds above £10 million. These include Amphista Therapeutics £38.1 million, Enough (formerly 3FBio) £35.9 million and Build a Rocket Boy £36 million.

Kerry Sharp, Director of Entrepreneurship and Investment at Scottish Enterprise, said: “This latest research is hugely encouraging and shows that the Scottish market continues to grow thanks to a diverse mix of investors who are working collaboratively to channel more funding into innovative young companies.”

“Nearly twenty years ago SE embarked on an innovative co-investment approach which aimed to transform Scotland’s risk capital market and cultivate a positive environment for entrepreneurial businesses.”

“Since then, we have levered over £2 billion of private investment into Scottish companies and seen the environment go from strength to strength where our most promising and innovative young businesses are supported with the investment and advice they need to start-up, commercialise and scale.”

Scotland’s strengths include increasing investment by Venture Capital investors as well as an organised and established business angel market. There are a growing number of Scottish companies that are also now successfully attracting international investment.

Challenges remain in the investment market and are shared across the UK. These include many investors favouring later stage and larger investments.

Focusing efforts on growing the early-stage pipeline of companies and attracting international investment to Scotland is becoming even more important. These are the start-ups, spin-outs and early-stage companies with the potential and ambition to scale, that are bringing new solutions and technologies to market in the sectors where Scotland boasts competitive advantage.

Scottish Enterprise’s focus is to nurture and grow this pipeline with tailored advice and support, and to co-invest alongside private investors to increase the availability of equity investment via its Scottish Co-investment funds.

Kerry concluded: “In terms of our future focus, the importance of our support for early-stage companies , as part of Scotland’s supportive ecosystem, has never been clearer. It is critical that Scotland continues to support an investment community working with a variety of investors who are committed to making patient early-stage investment available. That, alongside the right advice and support, is fundamental to an entrepreneurial Scotland that can create jobs and deliver innovative solutions for the future.” 

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