Growth investor BGF reports another ‘strong’ year

The Scotland and Northern Ireland team of the Business Growth Fund (BGF) has reported another “strong” year in 2023, delivering five successful exits and investing £33 million in the growth economy.

In total, BGF said it backed 44 new businesses and invested £430 million across the UK and Ireland in 2023.

It said that in 2023, local investment activities helped to support acquisitions, new product development, roll-out strategies and succession planning, as well as directly providing working capital and strengthening balance sheets for portfolio companies.

BGF said its Scottish investments in 2023 included: a £4.5 million investment in Stellar Omada, an Edinburgh-headquartered technology services company; a £2 million investment into STC INSISO, an Aberdeen-headquartered software solutions company; and a £8m investment into Trojan Energy, another Aberdeen-headquartered business that has developed and commercialised an innovative “flat and flush” EV charging system for on-street users.

The latter investment was completed alongside the Scottish National Investment Bank as part of a £26 million funding round.

BGF follow-on investments continued to support growth opportunities across its existing Scottish portfolio including a multi-million-pound investment in Scottish Dental Care Group, a national provider of NHS and private dental treatments; and a further £2 million investment in MRM Global (re-branded to Hyble), a provider of marketing technology to the global drinks and hospitality sector.

BGF also announced five successful exits in Scotland and Northern Ireland during the year at a total value of over £260 million, delivering a combined money multiple of 2.3x. The exits included Kick ICT and STATS (UK) Ltd. – the latter being the company’s first investment in Scotland.

BGF invested a total of £16 million in STATS between 2012 and 2023, enabling the company to expand its international footprint and invest in people and product.

The Kick ICT exit was completed in the latter half of 2023, delivering BGF a strong internal rate of return (IRR) of 38%.

BGF is one of the largest growth capital investors in the UK and Ireland. Its focus as a minority partner is to provide backing, via capital and expertise, to support companies and management teams to achieve their growth aspirations whilst retaining control.

Patrick Graham, BGF’s head of Scotland and Northern Ireland, said: “I’m very happy with the performance the team has delivered this year, particularly given the economic backdrop.

“Over the last year, we’ve backed a diverse range of brilliant businesses with both new and follow-on funding packages. At the same time, we secured strong exits from five portfolio companies, delivering us a strong rate of return.

“The results of our 2023 activity demonstrate not only the success of BGF’s investment model but also the quality within our portfolio.

“In 2024, BGF will continue to help ambitious businesses realise their growth potential. We know that the general market outlook in Scotland, and indeed globally, continues to be challenging.

“However, despite the wider market picture, we are confident in our pipeline of deals because it is built on established relationships and a deep understanding of the local SME market which continues to show remarkable resilience despite what is thrown at it.

“The variety of success stories we have had in 2023 underlines this.”