As UK declines...

Scotland hits new heights with VC investment

Orbex rocket
Orbex was among the firm’s that received VC backing

A record breaking £705m of venture capital (VC) was invested in some of Scotland’s most promising businesses last year, according to KPMG’s latest Venture Pulse Survey.

The figure is particularly impressive as figures published last week showed VC investment across the UK fell by almost a third (30%).

The Scottish record was achieved despite a 15% fall in the fourth quarter compared to the same period in 2021. Also, the volume of deals was down by 5% year on year.

Despite the sluggish finish, 2022’s total surpassed the previous year’s tally of £626m which was also a record.

Amy Burnett, KPMG private enterprise senior manager in Scotland, said: “2022 cemented Scotland’s reputation as a place where exciting young companies are born and where investors are backing promising start-ups.

“Unlike the rest of the UK, Scotland posted record-breaking VC volumes in 2022. While certainly not recession proof, Scotland’s breadth, and depth of scale up sectors did provide some cover during a challenging 2022.

“Globally investors have increasingly turned away from sectors that rely on consumer spend to drive growth and are instead doubling down on investments in those sectors where technology is addressing big macro trends such as health tech and ESG.  

Amy Burnett
Amy Burnett: Scotland’s breadth, and depth of scale up sectors provided some cover

“With an abundance of these businesses being nurtured outside of London, it is good news for Scotland’s deep tech, clean tech, and health tech firms.”

Graeme Williams, M&A director, KPMG UK, added: “As expected VCs did become increasingly cautious and invested funds into less risky asset classes during the final quarter of the 2022. Most investments in Q4 across Scotland were for later stage funding, suggesting that investors backed more established firms to shield from risk.

“We know there is still dry powder out there waiting to be deployed, and while we’re expecting a quiet start to 2023, the Scottish market is likely to see soft growth especially if a recession is shorter than expected.

“Soaring energy costs sparked a significant uptick in VC investment in new energy alternatives, electric vehicles, and cleantech last year.

“Heading into 2023, the acceleration of investment in energy alternatives is particularly exciting as such investment is critical for meeting the world’s climate change targets.”

Standout deals during the quarter included Forres-based spaceflight company Orbex securing £40.4m for its Series C funding round, led by a new investor, the Scottish National Investment Bank as it counts down to the first vertical launch from UK soil.


RoslinTech closed an £11m Series A capital raise, led by life sciences investor Novo Holdings. The investment aims to fuel the company’s next wave of growth in its mission to become the leading provider of animal cell lines to the cultivated meat sector.

Scottish makeup artist and beauty influencer Jamie Genevieve has announced a £5.5m Series A round – with £1m coming from Pembroke VCT. Glasgow-born Genevieve, who has built a following of more than three million social media followers, established VIEVE in 2020 to deliver high performance, yet accessible beauty products.

The lion’s share of Scottish deals in Q4 involved businesses in Edinburgh (16), followed by Glasgow (6). 22 of the quarter’s 34 deals were late-stage VC.

Commenting on the VC landscape for the UK, Warren Middleton lead partner for KPMG’s emerging giant centre of excellence, said:  “On the back of an extraordinary year of post-Covid fundraising in 2021, UK businesses got off to a strong start to 2022.

Our story last week: Scotland has out-performed the UK

“However investor sentiment was subdued in the final half of the year, driven both by global macroeconomic factors and by the uncertain domestic political situation experienced from the summer onwards.  

“Dry powder is still being deployed — what’s changing is the way it’s being invested. There is some sense that IPO activity could make a broad return in the second half of the year, with some pockets of activity even before that.

“ESG businesses could be particularly compelling; while we might not see IPOs in the space right away, we could start to see companies beginning the work required to become IPO ready.”

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