No decline in appetite

Brexit uncertainty ‘fails to slow venture capital flow’

Amy Burnett, manager, KPMG Enterprise with Catherine Burnet, senior partner

Venture capital investment into Scotland remains robust in spite of Brexit uncertainty, according to new figures.

More than £32 million of venture capital was invested into Scottish start-ups in the third quarter of 2019, according to KPMG’s latest Venture Pulse survey.

The figures, compiled by Pitchbook, reveal that both deal volume has dipped slightly, from 16 deals in the previous quarter, to 13 in Q3, deal value has increased, from £23.8 million in the second quarter of 2019, to £32.42 million in quarter three.

The start-ups that benefited from funding included life sciences business, firms focused on agri-tech, and manufacturing business, with nine based in Edinburgh and the Borders, three in Glasgow and West Central Scotland, and one in Dundee.

The most sizeable deal in the last quarter involved pharmaceutical and biotech firm MedAnnex. The Edinburgh-based business raised more than £11 million in venture capital backing, to assist it with its pioneering work, developing new treatments for conditions including autoimmune diseases.

UK-wide, VC investments have also risen, up 19% on the previous quarter, to more than £2.4bn.

Commenting on the data, Amy Burnett, manager in KPMG’s Enterprise team, said: “VC investment in Scotland’s fast-growth businesses is as robust as ever and it appears Brexit and other uncertainties have failed to slow the appetite for supporting tech-focused industry disrupters.

“One of the biggest challenges many start-up founders often discuss is the lack of access to funding and investment support, as it’s primarily centred on London. But, Scotland has begun to develop a reputation for collaborative tech start-up hubs and that has helped to unlock funding support from around the world.

“Looking ahead, we’re entering a period of great volatility, which will undoubtedly have some degree of impact. But, the VC market is in a robust position, with significant liquidity, which should ensure continued success for Scotland’s growth-hungry new businesses.”

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