Welcome to the latest edition of the DIGIT Deal Roundup.

Scotland’s tech sector had an explosive month, now mid way through the first quarter of the year, with a swath of new investments, funding, and acquisition news across the industry.

For a recap on those standout stories, here’s our round-up.

Funding and Investments

Quantum Tech Projects Gain £45M UK Gov Investment

Accelerating the use of quantum technology to improve healthcare, energy, transport and more has received a major boost as science minister Andrew Griffith announces £45 million of investment.

The projects receiving funding include the development of a high-tech brain scanner using quantum technology, aiming to improve the diagnosis of disorders such as epilepsy and dementia, and a smart navigation system for trains, using quantum sensors to save costs and enhance safety in tunnels.

“This investment will help our researchers and innovators develop the blueprint for quantum computing hardware and software and secure the UK’s place in this developing field,” Dr Kedar Pandya of UKRI said.

Read more here.

UK Gov Announces £100 Million for AI Regulation & Research

The UK is seeking more agile AI regulation, bidding to back regulators with the skills and tools they need to address the risks and opportunities of AI, as part of the government’s response to the AI Regulation White Paper consultation today (February 6).

It comes as £10 million is announced to prepare and upskill regulators to address the risks and harness the opportunities of this defining technology.

The fund will help regulators develop research and practical tools to monitor and address risks and opportunities in their sectors, from telecoms and healthcare to finance and education. For example, this might include new technical tools for examining AI systems.

Read more here.

Scottish SMEs Receive £1M to Explore Additive Manufacturing

A £1 million project has encouraged more than 100 small to medium sized enterprises across Scotland’s manufacturing industry to explore the potential of additive manufacturing (AM) techniques – industrial 3D printing – that could add economic value and open up new commercial opportunities.

The three-year Additive Manufacturing Business and Technology Support (AM-BATS) project has helped small businesses across a range of different sectors to learn more about how to design and adopt new processes, with the end goal of developing more sustainable products and entering new markets.

“Working with NMIS on our medical device will enable us to access new markets and could see the creation of new job opportunities in the healthcare manufacturing industry,” Anne Inch, founder and managing director at Confidence Plus said.

Read more here.

Edinburgh Uni Receives £24m for AI Innovation Hubs

A £1 million project has encouraged more than 100 small to medium sized enterprises across Scotland’s manufacturing industry to explore the potential of additive The University of Edinburgh has received £24 million in funding from the Engineering and Physical Sciences Research Council (EPSRC) to boost AI innovation.

Of the nine centres announced as part of EPSRC’s £80m UK-wide investment in applying AI to real world data and research, Edinburgh will lead or be involved in more than half, further cementing its place as a driving force in the development of AI in the UK.

“Long-term research funding has led to revolutionary advancements that have made AI a powerful tool for many applications,” Proffessor Charlotte Deane, executive chair of EPSRC said.

Read more here.

Watt Laser Expands Glasgow Operations Following Grant

Watt Laser, which specialises in the development, design and manufacture of laser processes, systems, and software has completed a £433,000 project aimed at expanding its business operations within the Clyde Gateway Tradepark in Glasgow.

The expansion, which started in September 2023, landed a substantial boost of £128,000 in the form of a grant from Scottish Enterprise. According to Watt Laser, Scottish Enterprise has been instrumental in supporting its growth journey, providing assistance through SMART and R&D grants to facilitate the development of its technology.

With the expansion, Watt Laser says it will be capable of enhanced productivity, operational efficiency, and increased innovation capacity. The expansion also led to the creation of three new full-time positions, while safeguarding eight existing jobs.

Read more here.

Biotech Sector Gets £100M in New Funding From UK Government

Biotech firms helping to pioneer new technologies to prepare for pandemics, protect against floods, innovative farming, and more have been awarded £100 million from the UK government.

Six new “Engineering Biology Mission Hubs” and 22 “Mission Awards” projects across the UK that look to address global challenges, increase national resilience, and drive economic growth through biotech are set to receive the cash from the Department of Science, Innovation and Technology.

“Cementing the UK as a science and technology superpower by 2030 is more than a slogan,” said Michelle Donelan.

Read more here.

New Funding Seeks to Make Satellites More Sustainable

The UK Space Agency has announced funding for work which aims to prolong the life of satellites, as part of efforts to ensure space remains sustainable for future generations.
The package includes a £2 million upgrade to the Satellite Applications Catapult’s In-Orbit Servicing and Manufacturing (IOSM) facility at the Westcott Space Cluster in Aylesbury.

The facility will provide unique capabilities in the UK where companies can verify, validate and demonstrate a range of in-orbit operations including manufacturing, servicing, inspection, repair and assembly.

Read more here.

Govan Viking Stones Receive £150K of Net Zero Energy Fund

A group dedicated to preserving and promoting one of the most renowned collections of early medieval sculptures in Europe has been awarded a grant of £150,000 by SP Energy Network’s Net Zero Fund to make vital sustainable upgrades to the home of the archaeological site in the heart of Govan.

Govan Heritage Trust is responsible for the maintenance and upkeep of Govan Old Church – a Grade A listed building on the banks of the River Clyde – and will use the funding to install a new river source heat pump, resulting in a 93% reduction in carbon emissions and a 20% saving in energy costs.

Read more here.

West of Scotland Gains £1.2M for Six New Innovation Colleges

More than £1.2 million is set to be invested in creating six new innovation colleges across Glasgow and the west of Scotland to help encourage innovation in local businesses.

“This is a significant moment for the Glasgow City Region and further highlights the crucial role the college sector will play in collaborating with the business community to drive innovation across Scotland,” Stella McManus, principal of South Lanarkshire College and a member of the College West Partnership Group, said.

Read more here.

Xergy Gains £3.1M to Expand Project Management Software Proteus

Technology company Xergy has raised £3.1 million in additional investment helping to drive the expansion of its project management software.

Its latest investment round for series A+ funding was oversubscribed, the company said, and was supported by both its existing investment base and a number of new strategic investors.

“This successful financial raise allows us to increase the size of our in-house development team by recruiting new talent who will focus on building Proteus’s generative AI,” Xergy co-founder Colin Manson said.

Read more here.

Scots Marine Tech Firm Gets Funding for AI Ship Weighing App

The firm’s “DRFT MRKS” software uses deep learning applied to video capture to provide an accurate measurement of a vessel’s weight and load. Accurate draught readings are necessary for determining how much cargo it’s carrying and what depths it can navigate safely.

The grant funding from Scottish Enterprise, the nation’s economic development agency, will be used by Tymor’s team to create a portable and commercially viable app version of the software without the need for cloud-based processing.

Speaking on the digitisation of the marine sector and the funding news, managing director at Tymor Marine, Kevin Moran, said: “In the next two decades the digitalisation of operations will drive more changes in the maritime sector than we have seen in the last century.”

Read more here.

Synaptec raises £6.5M to fund expansion plans

Synaptec Ltd, a leading innovator in monitoring and protection solutions for power network operators, has raised over £6.5M in funding to support its rapid expansion, including development of new manufacturing facilities in Scotland.

Synaptec’s Chief Executive Officer and co-founder, Dr Philip Orr commented: “Synaptec is experiencing rapid growth in demand for our instrumentation products across both electrical utility and renewable generation sectors. This reflects a global trend towards live, high-quality data supporting excellent asset management decisions and network resilience. We are proud to be developing our business and manufacturing capabilities in Scotland and exporting great technologies that support the global energy transition.”

Eleven Manufacturing Tech Projects Get £3.7M in UKRI Funding

Eleven manufacturing technology projects have been awarded £3.7 million in funding through UK Research and Innovation’s (UKRI) Made Smart Innovation (MSI) Challenge.

The MSI Challenge helps to take the risk out of innovation for UK-based manufacturers by supporting collaborations for creating new, innovative solutions with the help of industry experts.

“The importance of these kinds of innovations for the UK economy can’t be overstated,” said Chris Needham, innovation lead in the MSI Challenge.

Read more here.

Aquisitions

Barclays to Acquire Tesco’s Retail Banking Business

In a £600 million deal, Barclays has agreed to acquire the majority of Tesco’s banking business, along with around 2,800 staff, following regulatory approval.

Barclays announced on Friday its intention to take over Tesco Bank’s credit cards and unsecured personal loans, encompassing approximately £8.3 billion in lending balances.

Additionally, a 10-year distribution agreement has been established, allowing Barclays to sell financial products under the Tesco brand. Under this arrangement, Tesco, the largest supermarket in the UK, will retain its insurance, ATMs, travel money, and gift card operations, which it characterises as “capital-light, profitable businesses with a strong connection to our core retail offer.”

Read more here.

Nude Finance Acquired by Mortgage Specialist Tembo

Edinburgh-based Nude Finance has been acquired by London-based digital mortgage brokerage company Tembo Money.

The acquisition will allow Tembo to offer customers Nude’s Lifetime ISA and Nude customers will in turn be able to take advantage of Tembo’s mortgage brokering service from within the Nude app.

“We’re delighted to now be able to offer our customers access to an award-winning savings product,” Richard Dana, founder and CEO at Tembo, said.

Read more here.

Edinburgh FinTech Nucleus Makes New Acquisition

Nucleus Financial Platforms, the Edinburgh-based adviser platform group with over £80 billion of assets under administration from 250,000 customers, announces the acquisition of Third Financial.

Previously known as Nucleus Financial, the fintech company was created after it was acquired by James Hay Partnerships in 2021.

“By combining our scale, expertise and relationships, with their innovative technology, we’ll be able to offer a broader proposition to serve the needs of wealth managers and advisory businesses across the sector,” Richard Rowney, CEO of Nucleus, said.

Read more here.

Aberdeenshire Drilling Tech Company Acquired for £166M

Aberdeenshire-headquartered drilling tech company Coretax has been acquired by energy services firm Expro in a $210 million (£165.87m) deal.

With a headcount of 320, Coretax has been majority owned by private equity group Buckthorn Partners since 2018. The company specialises in performance drilling tools and wellbore cleanup, well integrity and production optimisation solutions.

“We are thrilled to announce our proposed acquisition of Coretrax, and look forward to welcoming John Fraser and his teammates to the Expro family,” Michael Jardon, Expro chief executive officer, said.

Read more here.

Virgin Money Buys Out abrdn From Investment Joint Venture

Virgin Money has agreed to purchase abrdn‘s 50% stake in their joint venture, Virgin Money Investments, following the launches of its new investment and pension services for customers.

Established in 2019, the joint venture combined abdrn’s and Virgin Money’s specialisms to create a new proposition for retail investors.

“Our joint venture with abrdn has successfully delivered a new investment service offering simple and straightforward investment options for customers,” Allegra Patrizi, managing director, business and commercial, at Virgin Money said.

Read more here.