Archangels keeps its place at the head of the pack with £8.75m investment

Investment syndicate Archangels has maintained its position as Scotland’s largest provider of business angel funding, despite last year’s £8.75 million total being below average.

The Edinburgh-based syndicate directly invested £4.88m into a range of Scottish businesses, with the remaining balance coming from partners.

The group, made up of around 100 individual members, aims to pump about £10m a year into early stage Scottish companies, including leverage from partners. Its largest co-investor is Scottish Enterprise.

In 2009, the last year for which comparable records are available, the group injected £5.6m directly out of a total £10.4m. Scottish Enterprise invested £3.2m alongside the group in 2009, but added just £1.9m last year.

Archangels chief executive John Waddell said the flow of deals remained strong and the exit market was opening up, allowing angels to cash in on earlier investments.

He said Archangels had expanded its management team from two to four, so it could work more closely with its portfolio of companies and investors.

The group’s new investments in 2011 included £400,000 with Xi Engineering Consultants – an engineering company specialising in the diagnosis and removal of vibration issues; £500,000 in biotech firm Fios Genomics, and an £800,000 investment in NCTech, the technology company behind the I-star 300 degree camera.

The group also participated in 12 follow-on rounds with existing businesses in the portfolio, including a total commitment of £2.5m to Scottish prosthetic technology group Touch Bionics.

Last year also saw three profitable exits for the syndicate – Lab901, Data Discoveries and Crombie Anderson.

Gerard Kelly, head of the Scottish Investment Bank (SIB), said angel investment was “incredibly important” in building businesses to lead Scotland out of economic stagnation. He said: “Archangels is one of SIB’s most active partners and has an impressive track record that I’m sure it will maintain as it supports these new companies.”

Recent data from business angels association Linc Scotland suggested angel investment reached record levels last year, more than making up for a small decline in cash from the public sector.

The group said the total committed by the sector was up more than 10 per cent on the year before at £26.4m.