In the first quarter of 2021, some £9.7 million was invested by angel north of the Border – the second highest on record after the fourth-quarter peak in 2019, according to figures from Linc Scotland, the business angel association.
Over the past two years, the angel syndicates have been increasingly successful in attracting co-investors into their deals, including venture capital and corporate venturing firms, Linc noted.
The amounts invested by these firms vary, but in 2020 other private firms co-invested with angels in 66 out of 97 deals, contributing 1.2 times the investment raised by the angels.
The second half of 2019 had seen a rapid increase in angel investing. During the closing three months of that year, angels invested £10.9m, before the onset of the pandemic hit investment activity throughout 2020.
Angel investment in Scotland also appears to be stronger than in the rest of the UK. In October last year, the UK Business Angels Association (UKBAA) produced a report in partnership with the British Business Bank.
It found that the value of initial and follow-on investment was considerably lower than in previous years.
Linc noted that the angel market was structured differently in Scotland from elsewhere in the UK, as much of the investment activity is done by angel syndicates rather than individual angels.
The association has 21 syndicates as members, estimated to have about 2,000 individuals actively investing in promising young companies with high growth potential.