In May 2014, one of Europe’s top tech journalists made a 24-hour visit to Edinburgh to research the city’s digital scene.
Until then, not too many reporters from outside Scotland had taken much interest in our nation’s capital as a bona fide tech hub.
I accompanied the journalist, Paul Sawers from The Next Web, from 7am right up to closing time in the The Bow Bar by the Grassmarket where we drew breath before necking a few ales.
It was a full on day, starting at Informatics Ventures-run EIE14 at the Assembly Rooms, jumping in a taxi to see the pureLiFi team, the light technology spin-out at that time based at the University of Edinburgh’s King’s Buildings, then onto travel search site Skyscanner at Quartermile before finishing the day at the city’s fast-growing incubator, CodeBase.
At EIE that morning, I made sure Paul met a couple of young Indian founders who were pitching their audio virtual reality product to investors.
The fledging startup, its founders and their product impressed Paul and a couple of years later he phoned me up to ask if I knew anything about the acquisition of Two Big Ears by Facebook as the story started to break.
The Next Web ran a few stories on the Scottish tech scene and its most prominent and promising players over the summer of 2014 - including on EIE, CodeBase, pureLiFi and Skyscanner.
It felt like another step up for the profile of Scottish tech, with The Next Web religiously pored over by investors, advisers and founders across the globe.
More than three years on, EIE goes from strength to strength and continues to play an important part in supporting our early stage technology entrepreneurs, CodeBase is the largest incubator in the UK, pureLiFi is one of our most highly rated tech companies and Skyscanner (described by The Next Web in 2014 as Scotland’s “Tech Titan”) only shows signs of going on to greater things following its acquisition by Ctrip last November.
Last Thursday, international investment and advisory firm GP Bullhound touched down in Edinburgh to present its ‘Titans of Tech’ report, research analysing the European tech scene and furthering a narrative around how the region’s tech companies can reach valuations towards $50 billion.
While this level of valuation is already a reality in the United States and China, our European tech equivalents are much further behind the curve.
Our own reality in Scotland is that we have a dearth of tech startups and scaleups who are showing signs of reaching the kind of valuations only previously achieved by Skyscanner and FanDuel.
In truth, a more realistic aim would be producing a critical mass of tech startups who, by way of external funding and revenue generation, can be valued in the £100 million plus range.
From this kind of level, it will become easier to build bridges to valuations that mean your tech company can be considered a titan or near titan.
If not, impressive exits will be on the cards.
Think of the sale of Blackcircles.com to Michelin in 2015, a deal that came in just under £100 million or, in the same year, the sale of Bill Dobbie-founded Maxymiser to Oracle.
On the subject of valuation, Blackcircles.com founder Mike Welch told me recently: “It’s time for us to stop banging on about unicorns, it’ more realistic and no less ambitious to motivate our young entrepreneurs to go as far as they can go, be the best that they can be and hopefully retain a meaningful piece of their company’s equity for their hard earned achievements.”
Ilkka Paananen, founder of Helsinki HQ-ed mobile game development company Supercell, strikes a similar vein: “Founders should not focus on valuation. We never set out to become Europe’s first $10 billion tech company, we were simply focused on creating great games that millions of people would want to play.”
So who are the companies to watch when it comes to the next big thing in Scottish tech? Administrate, LendingCrowd, MindMate, pureLiFi, TravelNest and ZoneFox were among the startups pinpointed and talked about at the GP Bullhound event at RBS St Andrew Square last week.
Nick Freer is a founding director at the Freer Consultancy and Full Circle Partners.