New research has revealed equity investment secured by Scottish businesses increased 36% to £690m in 2021, up from £509m in 2020.
Based on Beauhurst data, the Scottish Enterprise Risk Capital Market report confirms that Scotland’s investment market is among 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 £10m deal bracket, in addition to an increase in the number of Scottish companies raising larger investment rounds above £10m.
These include Amphista Therapeutics at £38.1m, Enough - formerly 3FBio - for £35.9m and Build a Rocket Boy for £36m.
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 20 years ago, we 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 £2bn 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 established business angel market.
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, according to Scottish Enterprise.
Its plan is to 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.
Sharp 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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