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Funding rises for care firms

Ageing population drives venture capital to health sector

Chris McCann and Stewart Whiting

Chris McCann and Stewart Whiting of Snap40 who raised £6.1m in seed funding


 

Healthcare is heading a list of sectors attracting investment from venture capital providers as an ageing population demands more drug development, technology and facilities.

Scottish companies raised £42million in the third quarter – more than double the amount raised in the previous quarter (£21million) – with £35.8m raised for healthcare projects.

Standout deals in Scotland included £18m raised by Edinburgh-based DYSIS Medical, a developer of medical equipment, and £8.54m by Care Sourcer, a care provider comparison site.

The Scottish trend mirrors the UK-wide and global story, which saw healthcare and biotechnology driving some of the quarter’s top investment deals, as recorded by KPMG’s Venture Pulse report. 

These included London-based gene therapy developer, Orchard Therapeutics (£112m), and drug developer Artois at £65m. Globally, healthcare companies raised £14.5 billion in the third quarter of 2018.




In total, £1.4bn of venture capital was invested in UK businesses in the last three months.

James Kergon, head of deal advisory for KPMG in Scotland, said: “The summer is usually quite a quiet period for investment, yet Scotland has continued to attract investors, particularly in the healthcare sector.

“Scotland’s healthcare companies, both large and small are thriving, and as the UK’s population continues to grow older, drug development and biotechnology will continue to be a safe bet for investors.

‘Start-ups fared particularly well, with early-stage financings accounting for £16m of investment, including a remote patient monitoring developer, Snap40, raising £6.1m in its seed round.

“This is particularly encouraging for Scotland as we prepare to leave the EU, and while investors will be keeping a close eye on negotiations in the coming months, shows confidence in Scotland’s economy and its ability to remain at the forefront of technological developments.”



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