Increasing the availability of, and access to, growth funding (directly and indirectly – but always alongside private sector co-investors) continues to be a strong feature of our efforts, as does delivering a range of support and guidance to companies looking to raise finance, through our Financial Readiness Service and investing in projects and lending to community groups with Low carbon initiatives to support Scotland’s transition to a low carbon economy.
The Scottish early-stage market has been exhibiting sustained growth with total investment into ambitious high-growth companies exceeding half a billion over the course of the 2017 (calendar) year – a record since we started capturing this data in 2003. Two features of the market particularly stood out for me. Firstly, the strong growth of investment in new and earlier stage deals – double what we saw five years ago, demonstrating that collectively we are making a significant difference to the investment landscape in Scotland. Secondly, the increasing number of companies successfully securing larger amounts of investment, often from international investors seeking the best global opportunities. This is testament to the strength of the Scottish entrepreneurial and investment eco-systems and the highly innovative companies that are flourishing here in Scotland.
We have played our part in the growth journey of this market, with SIB having invested £500m since our co-investment model was first established, leveraging £1.4bn from partners and co-investors. In 2017/18 alone we invested £43.5m in over 140 companies, leveraging £206m of additional funding into some of Scotland’s most exciting opportunities, whilst providing guidance and support to over 500 Scottish companies.
Scotland continues to stand out from the crowd as one of the most consistently high performing regions outside of London and the south east, in terms of both total investment and deal numbers. However, we need to continue to harness and co-ordinate our efforts if we are to maintain and improve this position in future years – there are a few regions hot on our heels.
Given this, during 2017/18, we continued our focus on establishing and building new relationships with international investors and pleasingly our companies secured more than £105m of international investment. However, to support even more companies in attracting greater quantum’ and later stage investment capital, last year we launched the £200m Scottish-European Growth Co-Investment Programme – an innovative, first of its kind partnership with the European Investment Fund (EIF). With commitments of £50m from each of Scottish Enterprise (via the Scottish Government’s Scottish Growth Scheme) and the EIF seeking to leverage £100m plus from EIF accredited investment funds from across Europe, the Programme helps bring new international capital into Scotland to support our most ambitious growth companies looking to continue their growth journey and scale internationally.
In the current year, we are building on our efforts to date and I am confident we will continue to support and stimulate an international, innovative and inclusive growth economy for Scotland.
In partnership with our colleagues in Scottish Government, Highlands and Islands Enterprise, and partner organisations such as the British Business Bank, we will continue to deliver a comprehensive package of financing support and funding advice, helping more companies fast-track their growth, fulfil their international ambitions and attract new investment into Scotland.
The current year also sees an acceleration of efforts to establish the Scottish National Investment Bank. The creation of the new Bank will be a tremendous boost to Scotland’s competitive and investment landscape and will be key to accelerating the Scottish Government’s ambitions for the economy.
The new entity will build on the significant achievements of SIB to date, as well as other public-sector initiatives, providing ongoing and new sources of strategic, patient capital to a range of companies in Scotland as well as a focus on infrastructure and mission led finance. I very much look forward to continuing to work closely with Scottish Government colleagues and other stakeholders in the months ahead, turning the plans for the Bank into reality. n
Kerry Sharp is head of the Scottish Investment Bank