Opportunities amid gloom
Angels target companies tackling crisis issues
Investors are seeking out companies developing solutions to problems such as climate change
Companies with the potential to tackle health and climate emergencies will be among the top targets for Scotland’s business angel investors in the coming months.
Investors are being drawn to firms that can develop solutions to the Covid crisis and growing concern over the impact of global warming, food and water shortages, and other environmental issues.
One investment group identified drug development as a key priority and is due to make a big announcement, confirming that key opportunities continue to arise in the currently depressed economy.
Kevin Grainger, chairman of Eos Advisory said: “Some of the best early stage Scottish businesses have the potential to make a significant impact on some of the key issues facing the world today, such as healthcare, climate change and food and water security.
“It is these innovative business that Scotland nurtures so well, and that Eos looks to invest in and support.
“Even in the middle of the current pandemic we take a sustained view with our investments and look for longer term global potential.
“This is reflected in our current deal flow and we are close to completing our largest investment deal yet, which will be Europe’s first cancer drug accelerator.
“Some, such as ILC Therapeutics, have significant opportunities to contribute to the fight against COVID-19.
Par Equity partner Andrew Noble said one of its top performers is Current Health – a provider of remote patient monitoring devices – which raised a further £9m in November.
“We’re delighted with Current Health’s progress and in particular its recent partnership with the Mayo Clinic in the US to predict and identify potential coronavirus cases in patients and health care workers using its AI powered wearable technology.
“This is an excellent example of home grown Scottish talent, and technology as a force for good.”
While opportunities continue to emerge, members of LINC Scotland, the national business angel association, approach the near future with greater uncertainty following a record year when they participated in 114 deals worth £103 million involving 87 companies.
The Scottish Investment Bank co-invested in many deals, along with venture capital and corporate funds, universities, and early stage specialists such as Foresight and Techstart Ventures, both managing funds under the Scottish Growth Scheme.
The figures are for the 12 months to end of March and the busiest quarter was the first three months of this year – just before the country went into lockdown.
Our companies have shown resilience and enterprise to ensure they will come out the other end of this crisis– Scott Carnegie, London & Scottish Investment Partners
Linc said that although the coronavirus pandemic may impact angel investing, the syndicates remain determined to continue investing in promising start-ups and scaleup businesses in Scotland.
London & Scottish Investment Partners, Archangels and Equity Gap are also seeking out opportunities.
Scott Carnegie, chairman of London & Scottish Investment Partners, said planning for the uncertainty of what will happen in the next year and surviving long enough for certainty to emerge are a crucial part of its work with portfolio companies.
“We are pleasantly surprised and impressed that our companies have shown resilience and enterprise to ensure they will come out the other end of this crisis. We look forward to continuing to help and invest in them, and in new cases that will emerge post COVID-19.”
Niki McKenzie, joint managing director at Archangels, said: “These are difficult and uncertain times for all of our portfolio companies, but we remain confident that businesses like these – led by change makers and entrepreneurs – will play an important role in driving the Scottish economy forward.”
Fraser Lusty, director at Equity Gap, added: “In response to coronavirus, we have been working with our portfolio companies to help them identify how to minimise business risk and leverage any opportunities.”