Archangels, which has ploughed funds into the likes of training management software specialist Administrate and cyber security firm ZoneFox, lauded a “steady” stream of ideas, which it said satisfy the appetite of its 100 or so members for investment opportunities that reinforce Scotland as an “entrepreneurial hotspot”.
The syndicate said it led £22.4 million of investment in Scottish tech and life sciences businesses this year.
It injected £10.9m of its own members’ cash in ten investment rounds, with co-investment of £9.4m from investment partners including the Scottish Investment Bank, which at £6m, was the largest co-investor. Other investment partners included NVM Private Equity, Maven Capital Partners, Par Equity and US-based Julz Co.
Archangels’ focus is Scottish tech companies looking for initial funding of £50,000 to £2m. Its investment activity this year included leading first-time investment in Bio-Images Drug Delivery, announced in March, to enable the firm to scale its business, focusing on its OralogiKTM precision-timed drug delivery system (£2m investment).
And in October it provided funding of £2m to Speech Graphics, enabling the Edinburgh and California based tech firm, which provides real-time, audio-based, emotional facial animation, to target the customer service sector’s intelligent virtual assistant market.
The year also saw two exits, which returned “significant” funds to Archangels members. Oregon Timber Frame, described as one of the UK’s largest independent timber frame house manufacturers, in April completed a buy-out of its non-management shareholders, including Archangels’ 15 per cent stake, ending a 20-year investment relationship.
Edinburgh-based ZoneFox was sold in October 2018 to California’s Fortinet, which secures the largest enterprise, service provider and government organisations around the world.
However, Archangels also saw two failures during the year, “reflecting the intrinsically high-risk nature of early-stage investing”.
Its chief operating officer David Ovens said: “Archangels led another record-breaking amount of investment in Scottish early-stage companies in 2018.
“In spite of the uncertainties around Brexit and the global economy, the tech and life sciences ecosystem in Scotland is buoyant. There remains a steady stream of innovative and ground-breaking ideas, satisfying the strong appetite of our members for investment opportunities that underpin Scotland’s position as an entrepreneurial hotspot.”
In addition, Archangels is keen to welcome new investors to its syndicate.