Scottish innovators attract record Venture Capital investment in Q3

Scottish innovators have attracted record Venture Capital investment

GLOBAL Venture Capital (VC) investors deployed record amounts of money into Scottish scaleups over the summer, with more than £197 million raised according to Venture Pulse, a quarterly report published by KPMG Private Enterprise.

The research, published using data supplied by PitchBook, recorded 57 transactions totaling £197 million invested into fast growth Scottish businesses in Q3 of 2021.

The roll out of Scotland’s COVID-19 vaccination programme and greater business confidence in the post-Brexit environment and opening up of most sectors, resulted in a busy summer of transactions.

Year on year, Q3’s figures also point towards growing investment in Scottish firms. During Q3 2020, £71.6 million was invested, and in 2019’s third quarter £32 million was invested. Looking back on the year to date, 20 deals valued at £64 million were recorded in Q1 2021, and Q2 finished with 60 deals with a value of £258 million.

Scotland’s largest deals during Q3 include Edinburgh based remote healthcare developer, Current Health, which raised £32 million in Series B funding led by Northpond Ventures. The firm has since been acquired in October by a listed US business. Renewco Power, an Edinburgh based developer of utility scale renewable power projects across Europe, attracted £24 million of corporate financing from FTSE 100 energy company, SSE plc via Corran Capital. In another significant deal, Snappy Shopper a Dundee based developer of a delivery app raised £19.5 million in Series A funding led by PayPoint.

Later stage deals continued to attract the most investment in Scotland, but interest in earlier stage deals grew with more businesses beginning to raise Series A and smaller rounds.

Amy Burnett, Senior Manager, KPMG Private Enterprise, said: “A busy summer of deals with growing levels of volume and investment has once again cemented Scotland’s credentials as an incubator and rapid developer of exciting, innovative businesses. As we emerge from the pandemic it’s clear to see that several scaleups have flourished in areas of growing consumer demand, including remote healthcare technology, home delivery services and renewables.

“Scotland’s vibrant tech community and highly skilled workforce continues to be a draw for investors hungry to invest in our pool of fast growth businesses. To maintain these record levels of investment, it’s important that we continue to support start-ups and scale ups to be as attractive as possible for VC investment, and to ensure their long-term growth.”

Graeme Williams, Director – Corporate Finance M&A, KPMG UK, said: “Investors are alive to the fact that the UK, and Scotland have a real glut of innovative companies operating within a tech ecosystem which continues to mature and build recognition on the world stage. A busy summer of transactions gives a clear signal that investor confidence is returning generally, and that interest in VC deals is growing year on year in Scotland.”

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