Should I invest in the Scottish tech sector?

HAVING advised the likes of Spotify and the manufacturers of CandyCrush, Hugh Campbell knows a thing or two about how tech firms make the leap from promising idea to billion dollar company.

A co-founder and managing partner of GP Bullhound, Campbell has 15 years’ experience of advising and investing in current and future unicorns across Europe.

He will be among the speakers at EIE16 event on May 12, offers small Scottish businesses the perfect platform to network with industry leaders and potential investors.

GP Bullhound managing director Hugh Campbell will be among the speakers at EIE16

Campbell insists the time is right to back the next generation of software innovators.

“The investment climate is very good - evaluations have stabilised, and it feels like you can get in at a decent price now,” he said.

“I think more in the medium term, the outlook for technology investing and business building in Europe has never been greater.

“If you go back 15 years, all of us, from lawyers to accountants to developers, were all doing it for the first time, we’ve learned a lot of lessons. The community itself is much more experienced. As a result, we’re creating more unicorns and billion dollar businesses than we have done previously.”

GP Bullhound was established in 2000 in response to what Campbell describes as “the incredible innovation” taking place across Europe.

“There really at that time weren’t any specialist advisors to help technology entrepreneurs grow globally successful businesses,” he said.

“The ones that did exist, at the time of the dotcom boom and bust, either went under or were so discredited they went back to the US. So there was an opportunity for Europe to build their own homegrown investment bank. We’ve been building GP Bullhound ever since.

“Back then it was all about the infrastructure of the internet - how do we move packets of data more quickly? Now the infrastructure is incredibly fast, and we have mobile internet, which we didn’t have back then, it’s less about the infrastructure and more about the products and services you can deliver across them.”

Two innovative Scottish start-ups on the rise since EIE

Based in Manchester, Campbell is regularly on the move to meet with companies and investors across the UK and Europe. A message he repeats regularly is that the best tech firms do not have to be based in the south-east.

“Technology companies are not just built in London,” he said. “Only 50 per cent of money that goes into technology business is within the M25. Which means 50 per cent goes somewhere else. Investors need to recognise that and get on the road.”

So what does Scotland have to offer for tech investors?

“It has a well-developed business angel community that has a strong pedigree of investing in technology businesses,” Campbell explained. “It has a strong university base spitting out talent, it has two cities in Glasgow and Edinburgh which have a very strong work-life balance, and the cost advantages over London, and you have less competition for talent - you can build a more loyal employee base outside of the capital.

“Scotland has a tremendous pedigree in technology and very strong electrical engineering and computer science courses at Heriot-Watt, Glasgow and Edinburgh universities. You’re creating a strong pool of computer scientists.

“I think one of the challenges for Scotland, and it’s no different to English cities outside of London, is that there’s a decent amount of capital at the early stage, the challenge is in the main they need to go to London to find the capital.”

Campbell name checks FreeAgent, which produces accountancy software space, Nucleus, which uses technology to deliver an investment platform for IFAs, and commercial vehicle tracker Fleet Alliance as Scottish tech firms he takes particular interest in.

He’s already looking forward to talking with more companies at the EIE investor showcase on May 12.

“If countries and cities are serious about technology they need to have these events,” he said. “You need to encourage people to get on a plane or get on a train and meet the companies.

“It’s important for investors and entrepreneurs to be given an opportunity to meet a whole load of companies in one go. Like Manchester and Bristol, Edinburgh needs an event like this to give investors a reason to come.”

- This article was produced in partnership with Informatics Ventures and investor technology showcase EIE16.