New figures from Scottish Enterprise, the country’s government-backed economic development arm, show that “blockbuster” financing for fantasy sports site FanDuel and TauRx, the biotech firm co-founded by Professor Claude Wischik of Aberdeen, accounted for more than half the total.
This pushed the overall value to a new record despite a slight drop in the number of deals completed, which fell by four to 214.
Edinburgh-based FanDuel raised £176m in July 2015, valuing it at more than the $1 billion milestone that private firms must pass to reach “unicorn” status. TauRx landed £88m in October 2015 to help fund further clinical trials of its drug for the treatment of Alzheimer’s.
Those deals have helped drive a near four-fold increase in early-stage investment since 2012, according to the latest Risk Capital Market report commissioned by Scottish Enterprise and compiled by Young Company Finance.
Omitting those two funding rounds, 2015 still saw “high levels of investment”. Jonathan Harris, editor of Young Company Finance, said this is being driven by a growing variety of funding sources.
“The risk capital market in Scotland has consolidated considerably in the last couple of years, with more funding available to young companies from a wide range of sources including business angels and angel syndicates, crowdfunding, venture capital firms and corporate venturers,” Harris said. “Most months see new investors arriving on the scene.”
Although last January saw another mega-deal in the form of £128m for Edinburgh’s Skyscanner, overall figures for the first quarter of 2016 show a decline from the highs of 2015.
Kerry Sharp, head of the Scottish Investment Bank, an arm of Scottish Enterprise that invests in start-up companies, said: “2015 was an exceptional year, and while we haven’t seen such large deals this year, we are seeing a continuing strong appetite for investment on both the supply and demand side in 2016.
“All going well, we’d be hoping that the investment total for the Scottish market in 2016 will beat the pre-2015 record.
“There’s still six weeks of business to be done with a number of deals in the pipeline – it’s looking positive at the moment.”