Firms will have to get 'scrappy' to lock down funding in 2023, says Glasgow-based investment expert

"Boring” British businesses and “superior” products are set to be some of the top investment trends of 2023, but firms will have to get “scrappy” to lock down investment, according to a Glasgow-based expert in bankrolling burgeoning firms.

Helena Di Biase is managing director at Raising Partners, which she founded in 2017, and it is focused on early-stage equity investment support, working with clients from pre-seed stage through to Series B. She has worked with more than 175 early-stage firms and raised more than £60 million for 60 tech start-ups.

The investment guru is forecasting “boom” time for “boring” British businesses, stating: “Widgets are not sexy. But having seen the risks of an unstable global supply chain, I think there are some massive changes coming our way. The Department for Business, Energy and Industrial Strategy has launched a consultation on boiler standards, which may lead to all new domestic boilers being required to be ‘hydrogen-ready’ from 2026. Companies that make these boilers, related widgets and anything downstream from it will flourish – and that’s just one example.”

Ms Di Biase also highlights how investors won’t plough funds into in a firm that can’t demonstrate growth in this macro environment. “Investors can’t wait for [direct-to-consumer] brands to reinvent the wheel and transform consumer behaviour. Companies will have to meet shoppers where they are,” she said, and cited a recent survey finding that more than a quarter of UK shoppers have spent less money online in the last six months.

She continued: “We invested in &Sisters, a safe, sustainable and beautifully designed period products company. They were very deliberate in what they did... they went to exactly where people buy their period products and grew 200 per cent [year on year] because of deals with Boots and Asda. They grew despite being more expensive because they provided a product which was superior to what existed in the market. They didn’t ask, or expect, consumers to change their behaviour.”

Demonstrable

Investment being little and often is also on her list of predictions, and she explained: “Firms will have to get scrappy to justify investment. In 2023, every penny will be a prisoner and big and shiny ideas won’t cut it. Investors will only part with their cash if they can see clear, demonstrable growth.”

The investment expert – formerly known as Helena Murphy – is also expecting to see less group think, and more due diligence. She said: “For far too long, investors have followed the big funds, believing that if someone like Octopus is in, then it must be a safe bet. But now, investors will have to invest with conviction… firms will have to get normal on valuations. There will be less money available, and it will take much longer to get. If a company wants investment in the bank by September 2023, it will have to start raising in January.”

'If a company wants investment in the bank by September 2023, it will have to start raising in January,' says the Raising Partners boss. Picture: Elaine Livingstone.

The businesswoman, who said in May that she believed Glasgow’s mix of talented entrepreneurs, advisers and funders could replicate the success of California’s Silicon Valley, also stresses that utilities will be front of mind for investors in 2023. “[Glasgow’s] Brillband just cleared its second round of investment because they are providing faster broadband at a cheaper price to consumers. Look for replicas of that behaviour in other sectors,” she said.