Firms buoyant

Rising VC deals shows appetite for scale-ups

Amy Burnett

Amy Burnett: ‘impressive results’

Scotland’s scale-up businesses finished 2020 on a buoyant note, with venture capital funded deal values rising every quarter as the economy reopened.

The latest KPMG Venture Pulse Survey reveals there were 23 VC deals in Scotland between October and December with a combined value of £97.6 million.

In the previous quarter there were 17 deals valued at approximately £71.6m.

In total, Scotland accounted for almost 6% of VC investment in the UK, which has witnessed a record year for deals, totalling more than £3.8 billion.

Scotland’s biggest deals included Aberdeen-based decommissioning company, Well-Safe solutions, which secured more than £33 million in investment, and space-firm, Orbex, receiving almost £24 million to support the development of a satellite launching spaceport in Sutherland.

Amy Burnett, senior manager with KPMG private enterprise in Scotland, said: “While Scotland’s share of the UK VC investment space remains relatively low, it’s absolutely clear that there’s a real appetite for supporting the aspirations for Scottish scale-ups.

“We’ve seen deal value rise every quarter, which is incredibly impressive, given the challenges Brexit and Covid-19 have created for the overall economy.

“The data appears to demonstrate that investors are focusing on some of Scotland’s most promising sectors – from energy decommissioning and clean energy to technology and life sciences.

“Entrepreneurial businesses with a clear vision and strategy are riding out the current storm and laying down roots for sectors that could produce significant financial gain and sustainability in Scotland’s future economy.”

Across the UK, 2020 broke new records with more than £11.7bn of VC investment made into UK scaleup businesses across 1,969 deals. The UK was the jewel in the European crown for attracting VC investment during Q4 with six of the top 10 largest European deals involving UK scale-ups.

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Bina Mehta, head of KPMG’s emerging giants practice, said: “The UK’s ability to produce successful, innovative businesses with strong management teams has shone through this year, against the most challenging economic background. 

“We continued to see an increase in participation from Corporate VCs. Unsurprisingly, given the economic headwinds, investors dialled back activity in early-stage activity with angel investment accounting for just 7% of the VC investment last year, which could hamper the UK’s ability to nurture those fast growth businesses in the future.

“As the pandemic caused a shift in consumer behaviour, there were big gains for innovative businesses operating in the IT, Healthcare and Consumer Products and Services (B2C) sectors.”

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