£65m Scottish Universities Fund to help address company funding gap

The taxpayer-backed Scottish National Investment Bank has formally launched a new fund aimed at tackling the challenges faced by university-linked companies in accessing capital.

The Scottish Universities Fund will begin investing this coming spring. It is designed to support the creation and growth of innovative businesses emerging from Scotland’s universities, while addressing a capital shortage through mobilising additional private investment.

The Scottish National Investment Bank (SNIB) will provide up to £65 million of cornerstone capital and establish the investment platform as a central point to engage investors, founders and partners.

Event speakers Willie Watt, chair of the Scottish National Investment Bank; Alyn Smith, Minister for Innovation, Technology and Tertiary Education; and Sir Jim McDonald, Emeritus Principal of the University of Strathclyde, join principals and senior leaders from Scotland’s universities at the launch in Edinburgh, held at the Scottish National Investment Bank’s head office. Picture: Phil Wilkinson / SNIB

The fund is designed to work alongside the existing investor network, including Scottish Enterprise, and support the wider innovation ecosystem.

Two complementary investment strategies make up the new fund’s offer. The “ignition strategy” will fund pre-seed to seed businesses, while the “accelerator strategy” will contribute to series A-plus funding rounds, enabling companies to scale.

The ignition strategy will deploy early-stage capital in the £250,000 to £1.5m range. Of the bank’s £65m cornerstone investment, £15m is earmarked for these investments. The accelerator strategy will fund rounds in the region of £2m to £8m, and £50m of the £65m investment is earmarked for these rounds.

David Ritchie, SNIB’s chief executive, said: “Scotland’s universities are among our greatest national assets. They produce world-class research, exceptional entrepreneurial talent and breakthrough ideas that can support long-term economic transformation.

“Despite Scotland delivering disproportionate research output compared to our population, founders can struggle to access the capital and business support needed to commercialise innovation and scale successful models.

“The Scottish Universities Fund is designed to help address that gap and create stronger pathways for ambitious companies to start, scale, and stay in Scotland.”

He added: “Our ambition is not simply to provide capital. It is to help build a stronger innovation ecosystem, attract additional private investment and ensure more of the value created by Scottish innovation is captured here in Scotland. This is an important step in delivering the bank’s innovation mission and supporting Scotland’s long-term economic growth.”

The launch event took place at the bank’s Edinburgh office.