Early-stage Scots firms get £307m of growth finance

Scottish Enterprise CEO Adrian Gillespie

Scottish Enterprise announced it invested £50.71 million into 102 early-stage high growth investment opportunities in 2021-22.

The enterprise agency said its investments helped leverage a further £257 million from private sector investors resulting in over £307 million of growth finance for early-stage Scottish businesses last year.

“2021/22 proved to be the strongest on record for attracting international co-investment with more than half of the finance leveraged coming from global venture capital firms and corporate investors,” said Scottish Enterprise.

“This was as a result of ongoing work to build investor networks internationally, complementing the work of the Scotland’s Global Investment Plan, and underlines the vibrancy of Scotland’s investment market and the international appeal of Scottish companies.

“2021/22 also saw an increasing number of businesses continuing their growth journey under new ownership having successfully reached the stage where exit opportunities are available for early investors, allowing Scottish Enterprise to generate £106 million of income.”

Scottish Enterprise CEO Adrian Gillespie said: “Last year was an exceptional year for our early-stage investment activities.

“Not only did we see a healthy number of deals, but our maturing portfolio of investee companies saw strong exit opportunities allowing us to generate significant income to re-invest in the economy.”

Notable investments during the year included:

Verlume — an investment into theAberdeen-based subsea technology company alongside Edinburgh-based venture capital firm Par Equity and included existing backers, Orchard Venture Capital raised £2.5 million in a further funding round.

Talking Medicines — an investment alongside new international investor Thairm Bio and existing investors Tern and SIS ventures in a £1.5 million funding round to support its ambitions for expansion into the US. The Glasgow-based patient intelligence company has developed a data platform – PatientMetRx – which uses machine learning and natural language processing to provide science-based insights.

In4Derm — a spin out from the University of Dundee’s School of Life Sciences. An investment via SE’s Scottish Venture Fund alongside o2h Ventures in a £1.6 million pre-Series A funding round to support the continued development and expansion of its pipeline of first-in-class anti-inflammatory and orphan indications therapeutics.

Boundary — an investment alongside partner Equity Gap and Skyscanner co-founder Gareth Williams and co-founders Robin Knox & Paul Walton and chairman Richard Lewis into this Scottish home security start-up. £3.7 million was raised to scale up the Edinburgh-based company which launched its first product in March 2021.

Kynos Therapeutics — a spin out of the University of Edinburgh, raised £9 million to progress development of therapies at the interface of inflammation, immunity and metabolism. The initial financing round was led by Epidarex and joined by IP Group and Scottish Enterprise.

Notable exits realised during the year included:

Current Health — a co-investment alongside Par Equity, was acquired by US based Best Buy for $400 million, which enhances the company’s ability to expand at scale through access to first-class supply and logistic networks whilst growing their Scottish and US based team.

Smarter Grid Solutions — a spin out of Strathclyde University, was acquired by Mitsubishi Electric Corporation and has embarked on the next stage in its global growth whilst maintaining and growing its Scottish presence – a co-investment with Scottish Equity Partners.

Spoonfed — an investment alongside Equity Gap, was acquired by 365, allowing the business to continue to realize its full potential, particularly in the US and European markets from its base in Glasgow.