A HEALTHY investment ecosystem in Scotland is critical to nurture the rapid growth of the digital technologies industry, according to Polly Purvis, chief executive of ScotlandIS.
Purvis, who has headed up the digital technologies industry body for more than five years, believes there are more opportunities to secure funding than ever before, whether that is from tech-focused angel and venture capital investors or through more innovative crowdfunding platforms.
Her confidence is echoed by the shortlist for this year’s ScotlandIS Digital Technology Awards, which shows the breadth of companies that have received funding to take their business to the next stage.
The Investment Deal of the Year category features companies across the digital technologies spectrum, with online interior design store Houseology (formerly Occa-Home) and web design agency We Are AD nominated alongside fantasy gaming company FanDuel.
Houseology’s Series B investment round closed successfully in October 2014, enabling the company to rebrand and move beyond being predominantly an e-commerce platform to offering an array of tools and technology to inspire customers and design enthusiasts.
Meanwhile, We Are AD completed a management buyout of Alienation Digital and now has offices in Glasgow, London and Manchester.
FanDuel’s latest round of funding, which completed in September 2014, raised $70 million (£46m). While this investment came from a group of US investors, the company’s initial round of venture capital came from Scottish Enterprise and venture capital group Pentech. FanDuel co-founder Nigel Eccles has said that the firm would not have got to where it is today without the support of Scottish Enterprise’s Scottish Co-Investment Fund, which can match accredited private investment partners, up to a maximum of 50 per cent of the total funding package. In practice, this means between £10,000 and £1.5m as part of a total deal size ranging from £20,000 up to £10m.
“Match funding is something that Scotland does very well,” says Purvis. “There are many entrepreneurs who would have really struggled without that extra support. We have an active community of business angels; more venture capital firms getting involved in the market would be great. The Scottish Co-Investment Fund adds the extra firepower to give investees the boost they need.”
Paul Neeson, one of the judges of this year’s Digi Tech Awards and an associate at venture capital firm Scottish Equity Partners, said: “It’s a good time for companies seeking venture capital – probably the best it has been for ten years – and that’s as true in Scotland as it is everywhere else.We are excited about the emergence of a strong start-up culture, particularly in Edinburgh and Glasgow, because that’s what you need to create high-growth companies in the future. There are also some very healthy technology clusters in industries such as digital media, informatics and gaming.
“We are definitely seeing more technology-enabled companies in Scotland with world-class potential.”
For those looking to bypass the traditional fundraising circuit, homegrown crowdfunding platforms offer a new alternative. ShareIn, based in Edinburgh, is the UK’s first tech and health-focused equity crowdfunding website and itself received investment of $1m this spring. Pitches open for investment at present include Parkure, the Edinburgh-based health tech company seeking a cure for Parkinson’s disease.
Purvis says: “It is very good for the tech ecosystem to have a variety of fundraising options so we welcome innovative platforms like ShareIn. It is even better that we have a Scottish business showcasing capability in such an exciting sector.”
l 2015 Digital Technology Awards will take place at The Arches in Glasgow on Thursday 18 June.