Clean tech attracts 136% surge in VC investment
Interest in clean technologies such as renewables and life sciences contributed to a surge in venture capital investment in Scotland’s scale-up businesses last year.
Scotland’s growing businesses saw £626.9m raised in VC investment last year, a 136% increase on 2020 when £265.6m was raised, according to KPMG’s Venture Pulse Survey.
There were 32 VC deals in Scotland between October and December last year, with a combined value of £97m – while Q3 produced 57 deals valued at approximately £197m.
More than half (17) of Q4 deals involved businesses in the capital, cementing Edinburgh’s reputation as an entrepreneurial city with a burgeoning start-up and university spin out reputation. Glasgow took second spot with four investments, followed by Aberdeen and Dundee with three each.
Scotland’s biggest deals in Q4 included agri-tech firm Intelligent Growth Solutions (IGS), which raised £42.2 million through Series B funding, and Edinburgh-based Macomics, a biotech company which raised £7 million through a seed round involving investors Caribou Property, Epidarex Capital and Scottish Enterprise.
While the bulk of VC investment continues to flow into London, the rest of the UK saw buoyant levels of investment, with over £8.1 billion invested in regions across the UK over the last 12 months. Scotland accounted for 2.5% of the UK’s record £26 billion VC investment last year.
The Venture Pulse report found that the UK attracted more VC investment in 2021 than France and Germany combined, with the amount invested in fast growth businesses in the UK more than doubling (56%) in 2021 compared to 2020 (£11.3 billion). Deal volumes also rose by 10% from 2745 in 2020 to 3065 in 2021 according to the data compiled by PitchBook.
Whilst the bulk of VC investment continues to flow into London (£197.9bn), the rest of the UK saw buoyant levels of VC investment, with over £8.1 billion invested in regions across the UK over the last 12 months.
Commenting on the latest data, Amy Burnett, senior manager with KPMG private enterprise in Scotland, said: “2021 has been a fantastic year for VC investment in Scotland, and shows that investors know that there’s life outside of London.
“The gaze of investors has steadily been drawn north in recent years, and that’s been particularly true since the pandemic as homeworking has changed the dynamics of access to talent, the growth to scale ups, and of course deal making.
“Throughout 2021 we’ve seeing consistent investment for fin-tech, life sciences and ag-tech firms, which are flying the flag for Scotland in huge global growth sectors. These will remain hugely popular with investors for many years to come.”
Graeme Williams, director – corporate finance M&A, KPMG UK, said: “Investors continue to zone in on Scotland’s most promising sectors – from energy decommissioning and clean energy to technology and life sciences – seeing sustained investment throughout the year.
“With renewables and life sciences still high on the radar for VC investors, world leading regions such as Scotland should continue to attract large volumes of investment in these areas this year.”