It’s been a good year for Scotland’s start-ups, writes Nick Freer
As the Frank Sinatra song goes: “it was a very good year”, in this case for Scotland’s entrepreneurial world.
Sure, we didn’t have barnstorming exits à la Skyscanner in 2016, but enough good things took place to suggest our fast-growing corporate scene moved up a gear.
On the subject of Skyscanner, it was noteworthy to see the travel search site’s former chief technology officer Alistair Hann pop up at a new travel tech start-up. TravelNest, founded by 23-year-old Doug Stephenson and positioned to maximise holiday rental income, grabbed some headlines around the largest-ever seed round raise by a Scottish start-up.
Former advertising supremo John Denholm, a co-founder at The Leith Agency and currently chairman of eponymously named headhunter Denholm Associates, called me up around this time last year to say he wanted to put me in touch with a start-up that could be, as John put it, “Scotland’s next Skyscanner”.
After I coughed up a few cornflakes in response to a fairly bold prediction, John explained that he was going to his niece’s wedding that weekend and that Andrew McGinley was the founder, and groom-to-be, in question. A week or so later I met Andrew, Care Sourcer’s CEO and co-founder, and came away thinking that maybe John was not too wide of the mark.
John’s hunch was confirmed earlier this year when two high-calibre UK venture capitalists – BGF Ventures and ADV – each made Care Sourcer their first investment in a Scottish start-up. When former “FanDuel-er” Graham Jones joined the team as COO – Jones is the guy who, during his time at Kotikan, built the team that helped build both Skyscanner and FanDuel’s wildly successful apps – and when it won a major contract with an NHS Trust, more of the right type of writing appeared on the wall.
The fact that more VCs, including from outside the UK, are investing in our start-up talent is a big move in the right direction for our tech scene. More exciting still, we are very likely to see our most promising tech start-ups benefit from even larger funding rounds in 2018.
The shining light of our own venture capital community in Scotland, Scottish Equity Partners, announced the first investments from its recently launched £260 million SEP V fund in 2017, which invests in tech companies across the UK.
Edinburgh-headquartered CodeBase announced an alliance with Barclays last month that puts the UK’s largest incubator in an even stronger position heading into 2018 and beyond. Take a look at its website if you need a refresher on the incredible amount of software stars in the building.
One of these, Cultivate HQ, is helping to power the mobile development of one of Europe’s fastest-growing tech companies, Deliveroo. Another, Aquila Insight, was acquired by US marketing agency Merkle in the summer. GP Bullhound advised on the deal and next March the global investment advisory firm brings the Northern Tech Awards to Scotland for the first time along with the CEOs of 100 of the UK’s fastest-growing tech companies. I’m pretty sure they will be impressed with what they see.
The University of Edinburgh’s Bayes Centre opens its doors in 2018 and its very creation will, in itself, cement Edinburgh’s position as a global leader in the field of data science and analytics. Some of the industry and international partnerships in the pipeline for Bayes will take the reputation of the university’s School of Informatics even further up the world order.
Along with Informatics Ventures and the University of Edinburgh Business School, we launched the inaugural Scottish Startup Survey this year.
Confidence is important in every sector of industry and the hope is that our start-ups, in the most fledgling of sectors, remain cautiously optimistic about what 2018 holds.
Nick Freer is a founding director at the Freer Consultancy and Full Circle Partners