Equity investment in Scottish businesses increased by 36% in 2021, according to a new study from Scottish Enterprise.

The 2021 Risk Capital Market report examines the performance of the Scottish equity investment market compared with the other nations and regions of the UK.

The latest edition of the study, which is based on Beauhurst data, shows that investment in Scottish businesses increased to £690 million in 2021, up from £509 million in the year previous.

In addition, the report shows that Scotland’s investment market is among the best-performing in the UK behind the ‘Golden Triangle’ of London, the South-East and East of England.

Kerry Sharp, Director of Entrepreneurship and Investment at Scottish Enterprise said: “This latest research is hugely encouraging and shows that the Scottish market continues to grow thanks to a diverse mix of investors who are working collaboratively to channel more funding into innovative young companies.”

Particularly strong growth was recorded among businesses under the £10 million deal bracket, according to the report. There was also a marked increase in the number of Scottish firms raising larger investment rounds above £10 million.

2021 saw a number of significant funding deals. Edinburgh-based games developer Build a Rocket Boy raised £36 million while Amphista Therapeutics and Enough secured £38.1m and £35.9m respectively.

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Challenges remain in the investment market, according to Scottish Enterprise. These include many investors favouring later stage and larger investments.

Focusing efforts on growing the early-stage pipeline for startups and attracting international investment to Scotland will be critical moving forward, the organisation said.

Sharp commented: “In terms of our future focus, the importance of our support for early-stage companies, as part of Scotland’s supportive ecosystem, has never been clearer.

“It is critical that Scotland continues to support an investment community working with a variety of investors who are committed to making patient early-stage investment available.

“That, alongside the right advice and support, is fundamental to an entrepreneurial Scotland that can create jobs and deliver innovative solutions for the future.”

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