At GP Bullhound we have strengthened our track record of working with entrepreneurs at world-leading companies who understand the enabling power of technology and we are optimistic about what technology and its leading proponents can achieve. From smart retail and last mile delivery to blockchain and artificial intelligence, we are mapping the trends and innovations set to drive future growth.
In Europe, we now have more billion-dollar tech companies than ever and 2018 saw the largest year of fundraising on record. Our sixth annual Titans of Tech report earlier this year analysed the growth, strength and velocity of Europe’s leading tech businesses, the investment landscape fuelling this growth and identified the likely tech successes of tomorrow.
Scotland has produced billion-dollar valued tech companies of its own. These successes have played an important role in helping the nation’s ecosystem to mature, underpinned by world-class universities, internationally-renowned informatics schools and one of the most sophisticated angel communities around.
Recent weeks and months have seen Silicon Valley companies like UserTesting and OnScale open offices in Glasgow and Edinburgh – testament to how far Scotland’s technology hub has come. Only last week, in another notch for Scottish tech, Edinburgh gaming analytics company DeltaDNA was acquired by San Francisco-headquartered Unity Technologies, a deal in which we supported DeltaDNA’s Mark Robinson and his team as lead advisors.
We are increasingly sourcing mergers and acquisitions (M&A) and capital raising opportunities for Scotland’s most highly-rated tech companies by combining advisory services with bridgeheads into places like Silicon Valley and, increasingly, Asia.
While we know it can be hard for UK technology hubs outside London to build profile, recent investor activity certainly illustrates that more corporates and funds are examining Scotland for investment opportunities. While M&A transactions like Skyscanner and FreeAgent are well documented examples of large and mid-range deals, talk on the street says that Scottish tech companies to watch include TVSquared, IndigoVision, Care Sourcer and TravelNest. Perhaps one of these companies will reach the heady valuations achieved by Skyscanner and FanDuel.
Titans of Tech
Our Titans of Tech report showed that Europe’s billion-dollar or “unicorn” tech companies are growing faster than their US counterparts - by 28 per cent against 20 per cent - with the total number of unicorns up to 84 this year, from 30 in 2014. As a group these businesses are also much more profitable – and some would therefore argue, more stable – than their US or Asian rivals. This could be an important characteristic if, as WeWork experienced, we see funding and IPO markets tighten up.
The tech scene is about much more than billion-dollar companies and tech founders must navigate a series of funding rounds before anyone can even think about lofty valuations. In parallel, incredible value can still be achieved for founders and investors at much lower levels. Think of Blackcircles.com, founded by Mike Welch in Edinburgh and sold to Michelin in 2015, the DeltaDNA deal or Scottish data analytics specialist Aquila Insight being bought for £40 million by US marketing group Merkle in 2017.
Scaling a technology company brings the greatest reward to start-up founders, their teams, investors and ultimately the economy. As with Europe as a whole, we see the tech curve rising in Scotland and we are optimistic that there will be many more successes to come in the months and years ahead.
- Hugh Campbell, managing partner, GP Bullhound