Scottish firms ‘solving real world problems’ net £85 million of investment

More than £85 million in venture capital was pumped into Scottish firms “solving real world problems” in the second quarter of the year, new figures have revealed.

The latest KPMG Private Enterprise Venture Pulse report showed that companies from across the country - including businesses based in Edinburgh, Stirling, Dundee and Glasgow - enjoyed a boost totalling £85.3m in the three months to the end of June. It means that, in the first half of the year, 42 firms have shared out £184m in the form of venture capital (VC) investment.

The report noted that several “standout” deals had been completed during the second quarter. including £13m for Edinburgh-based Prothea Technologies, £8.8m for iGii, based in Stirling, and £10m for Dundee outfit Outrun TX.

Amy Burnett, KPMG private enterprise senior manager in Scotland.

Amy Burnett, KPMG private enterprise senior manager in Scotland, said: “We’re seeing continued investment in firms across Scotland, and I hope that we continue to see investment of a similar or larger size for the remainder of 2024.

“Whilst we are not experiencing a big uptick in VC money deployed, I remain hopeful for a calmer second half to the year now we have a new UK government in place. I’m pleased to see continued investment in exciting technologies in Scotland that are solving real world problems, and I look forward to watching these businesses grow.”

Graeme Williams, head of corporate finance M&A for Scotland, KPMG UK, added: “Scotland’s figures continue to be strong in the second quarter and with more stable market conditions, and hopefully investment levels continue to grow during the final two quarters of the year.”

Elsewhere in the UK, the survey pointed to the first signs of recovery in the second quarter of 2024, with the amount raised in the form of venture capital investment more than doubling on the first-quarter total.

After a quiet opening to the year, which saw some £3 billion in VC funding raised by UK businesses - the lowest amount seen in 22 quarters - activity picked up sharply in the second quarter, with £6.9bn raised. This was also up year-on-year on the £4.7bn raised in the second quarter of 2023 as investor sentiment started to become “more positive”, according to the data supplied by Pitchbook.

Earlier this year, KPMG’s Venture Pulse overview for 2023 showed that there had been a marked decline in global VC activity when compared to the record funding levels witnessed in 2022 and 2021. Across 2023, a total of 115 Scottish firms received some £359m worth of venture capital investment. During the final quarter of the year, a total of 45 deals were recorded for Scottish businesses, with a combined value of just over £71m.

Williams said at the time: “It is fair to say that figures for 2023 have revealed a slowdown, especially when compared to the record breaking results of the previous two years. After two years of exceptional activity, the market has reached a more stable point and what we are seeing not just in Scotland but globally is caution for investors who are a little more wary of the types of deals they commit to being part of.”