‘Beginning of end’ for biotech’s venture capital gap

AN INVESTOR returning to Scotland from America has hailed the “beginning of the end” of the venture capital (VC) “gap” for Scottish life sciences companies after launching his £50 million fund.

Sinclair Dunlop – who has a track record of securing investments from Europe, the Far East and the United States – has opened his Rock Spring Ventures office in Edinburgh and will pump funds into firms throughout the UK.

About half of the cash – which has been raised from the European Investment Fund, Scottish Enterprise, the Strathclyde Pension Fund and Aberdeen, Edinburgh and Glasgow universities – will remain in Scotland.

Scottish firms have a good track record of raising seed and business angel funding but have often struggled to attract higher levels of VC cash.

Dunlop said: “We won’t fill the gap on our own. We need up to six companies like Rock Spring investing in Scotland.

“One of the factors that has been holding Scotland back is not having a ‘local’ investor like ourselves.

“We know there have been VC funds that have visited Scotland recently and have looked at companies and kicked the tyres of potential investments. They’ve expressed interest and so now we’re going to be asking them to invest alongside us.”

His comments came after Mike Capaldi, commercialisation director at the Edinburgh BioQuarter science park, told Scotland on Sunday in December that his organisation is working to bring £50m of VC funding to Scotland over the next two years.

Edinburgh-based TPP Global Development raised £9.6m from private equity investors in 2010 to fund its drug development collaborations with universities.

Commenting on the launch of Rock Spring Ventures’ fund, TPP chief executive Tom Brown said: “It’s always good to have people who are able to make investments in the life sciences sector in Scotland. The more the merrier.”