10/11/2016 - The
Scottish Investment Bank today announced the findings of its annual risk
capital market report, revealing that risk capital investment in Scotland was
up 70% to £430m in 2015. The results represent an almost fourfold increase in
investment since 2012.
The announcement was made as Kerry Sharp, head of Scottish
Investment Bank, led a delegation of Scottish companies at the EIE technology
investor showcase event in London. Scotland’s presence at the event
reflects the growing attractiveness of Scottish start-ups to London’s
investment community, and follows a recent trip to EIE Hong Kong & Shenzhen
last month.
During 2015, VCs based outside of the UK invested some £290m
(80% of VC investment) into Scottish SMEs, building on over £50m from the rest
of the UK.
The Risk Capital Market in Scotland (2015), commissioned by
Scottish Enterprise and undertaken by Young Company Finance, also found that
2015 was a record year for business angel investment in Scotland, with over
£30m investment from this source, representing a 15% increase on 2014.
The report, the latest in a series from Scottish Enterprise,
provides detailed analysis of the early stage risk capital market in Scotland.
Key findings from 2015 include:
- Deals
of over £2m are now a strong feature of the Scottish market. In common
with other regions, 2015 was again characterised by the presence of
significant large deals, with the top 2 deals accounting for 60% of total
investment.
- While
the number of follow-on investment deals into Scottish SMEs reduced by 6%
over the year, the total amount invested in follow-on increased by 85%.
- The
number of first time investment deals for Scottish companies continued to
increase (from 52 to 54) during the year, with a 5% increase in amount
invested (£41m). This is a changed position from 2012 when 30 companies
received investment for the first time and amount invested reached £15m.
- The
ICT and Life Sciences sectors continued their dominance with almost 80% of
all deals. The Renewables sector again featured highly with 14 deals and a
relatively high average investment level per deal.
Commenting on the report, Kerry Sharp, head of the Scottish
Investment Bank, the investment arm of Scottish Enterprise, said: “This report
highlights that ambitious Scottish companies continue to attract significant
investment; a terrific result, reflecting ongoing demand for investment from
growth-oriented companies, matched by growing interest in Scottish propositions
from new and existing investment partners.
“On the supply side, we remain focused on maintaining a
buoyant risk capital market environment, and continue to seek new investment
partners to work alongside our existing partners and co-invest in the next
generation of ambitious Scottish companies. ’’
Jonathan Harris, editor of Young Company Finance and
director of Research and Communications at LINC Scotland, added: "The risk
capital market in Scotland has consolidated considerably in the past couple of
years, with more funding available to young companies, from a wide range of
sources including business angels and angel syndicates, crowdfunding,
venture capital (VC) firms, and corporate venturers. Most months see new
investors arriving on the scene, adding to the variety of funding sources. And
Scotland is now beginning to see some very large investment deals - still few
in number, but no longer entirely unique."
The EIE London 2016 investor showcase, running as part of
NOAH London, takes place at Old Billingsgate, and provides a unique opportunity
to showcase some of Scotland’s top tech companies. With around 350-400 VC and
private equity investors expected to attend, the Scottish delegation is hoping
to make its mark on the London investment community. The ten Scottish start-ups
selected by Informatics Ventures to represent Scotland at EIE London are:
Comcarde, Hermes Apps, SnapDragonIP, snap40, Make it Social, Cognitive Geology,
Krotos, Digital Sports Arena, Talking Medicines and The ID Co.
In
addition to the Scottish startups, EIE London also features early stage tech
companies from across the UK and Europe.
The companies attending the London event hope to emulate the
success of the trip to EIE China last month, where 11 Scottish companies
pitched to over 200 international investors at events in Hong Kong and
Shenzhen, and had a number of positive follow up meetings and conversations
while out in market.
To access a copy of the report, please visit: http://www.evaluationsonline.org.uk/evaluations/Search.do?ui=basic&action=show&id=595
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