Welcome to the latest edition of the DIGIT Deal Roundup column, featuring some of the top investment and acquisition news stories from May, 2023.

Scotland’s digital technology sector saw a number of notable deals across the month, including significant raises in the space sector, and a large acquisition from a Glasgow-based company.

Funding and Investments

NatureScot/ Scottish Government

A Scottish Government funded pilot study of using Internet of Things (IoT) sensors to monitor Scottish Peatland health has been a ‘significant success.’

The pilot was run by Edinburgh-based digital connectivity company FarrPoint in collaboration with NatureScot Peatland ACTION, the Carloway Estate Trust, Scottish Water and Scottish Futures Trust. The success will see NatureScot receive enough funding to extend the project another year, and possibly expand to new locations.

Dr Andrew Muir, CEO at FarrPoint said: “Many people don’t realise how vitally important peatland is to the environment. As well as supporting biodiversity, Scotland’s peatlands store 1.7 billion tons of carbon – the equivalent of around 140 years of the country’s annual greenhouse gas emissions.”

Read more here.

Inicio.AI

Inicio.AI, the debt management SaaS company which recently graduated from the University of Edinburgh’s AI Accelerator 2023 programme, has raised a further £500,000 in angel investment.

The money is set to be used for expanding from the debt management sector to financial services more broadly by recruiting more staff and clients, and developing the company’s technology further.

“I think the latest figures are that one in eight of those who are behind on a household bill are now attempting suicide because they just can’t face speaking to an agent at a company they owe money to [and] go through detailed expenditure to work out what they can afford to pay,” said Rachel Curti, CEO of Inico.AI

Read more here.

UK Space Agency

Partnerships will include major players like The National Aeronautics and Space Administration (NASA), large UK universities, and other national space organisations.

The UK Space Agency has announced £6.6 million funding for a range of international space partnerships and STEM education projects at the opening of this year’s Space Comm-Expo in Farnborough.

Dr Paul Bate, chief executive of the UK Space Agency, said: “This new bilateral funding multiplies up our agency’s impact by bringing in international investment. This helps to galvanise global innovation, drive up investment in the UK, deliver new missions and capabilities, and to champion the power of space to improve lives and understand the Universe.”

Read more here.

Department for Transport

Over 60 projects developing innovative technologies related to transport have received a share of £1.96 million in government funding, it’s been announced today.

Minister Jesse Norman said: “From making travelling easier for visually impaired passengers to improving rural connectivity, these winning projects have the potential to transform the future of transport.”

The funding has been awarded by the Department for Transport through the Transport Research and Innovation Grant (TRIG) programme. This year, a total of 67 transport tech projects — 80% of which are based outside of London — have received financial support.

Read more here.

Ace Aquatec/ Earth Capital Limited

Dundee-based aquaculture technology company Ace Aquatec raises new investment and makes shifts to its board of directors.

The funding comes from cleantech investor Earth Capital Limited (ECL), and will be used to expand Ace Aquatec’s product portfolio and presence in various markets.

“The team’s support and expertise will help us scale the business and take another huge step forward in the development of high-welfare products for the global seafood industry,” said Nathan Pyne-Carter, CEO of Ace Aquatec.

Ten jobs are also expected to be created through this investment in engineering, software and sales in both Dundee and Chile.

Read more here.

Department for Energy Security and Net Zero/ UK Space Energy

The UK Government has announced that it is putting £4.3 million of funding into projects that are developing spaced-based solar power technologies, in a move to help boost the UK’s long-term energy security.

Space-based solar power collects energy from the sun in outer space and then distributes it back to Earth via satellites, with the technologies required to facilitate this transferal rapidly emerging.

Grant Shapps, the Secretary of State for Energy Security said: “We’re taking a giant leap by backing the development of this exciting technology and putting the UK at the forefront of this rapidly emerging industry as it prepares for launch. By winning this new space race, we can transform the way we power our nation and provide cheaper, cleaner and more secure energy for generations to come.”

Read more here.

Eos/ British Business Investments

Eos, the St Andrews-based impact investment firm, has announced that British Business Investments, the wholly-owned commercial subsidiary of the British Business Bank, will commit up to £10 million to Eos through its Regional Angels Programme.

The Scots investment firm backs science, engineering, and technology companies that have the aim of addressing societal and environmental challenges.

Andrew McNeill, Managing Partner at Eos, said: “We are already bringing this relationship to life, with recent investments into Bioliberty and Dxcover, and are in conversations about a strong pipeline of opportunities.”

Read more here.

NHS trusts

The UK Government has announced a new £21 million fund that NHS trusts can apply for to accelerate the deployment of AI imaging and decision support tools.

The AI-powered tools can be used by doctors to help diagnose and treat conditions such as strokes, cancers, and heart conditions more quickly.

According to the government, the funding will be open for bids for any AI diagnostic tool that trusts want to deploy, but will have to “represent value for money for the funding to be approved.”

Dr Katharine Halliday, President of the Royal College of Radiologists, also commented, saying: “At a time when diagnostic services are under strain, it is critical that we embrace innovation that could boost capacity – and so we welcome the Government’s announcement of a £21 million fund to purchase and deploy AI diagnostic tools.

Read more here.

xDesign/ Soho Square Capital

Edinburgh-headquartered digital consultancy agency xDesign has announced new funding and sees a new member join the board of directors.

The funding came in the form of an investment from Soho Square Capital LLP. The deal was agreed for an undisclosed, eight figure amount, with the Soho Square website claiming to have a target investment size of £15-40 million. Over 65 recipients have received an investment from the firm to date.

“To date, we’ve been a fiercely independent organisation, a fact that has enabled us to provide a truly award-winning experience for our clients and our talented team of people,” said xDesign CEO Euan Andrews.

The investment will also see Joe Tebbutt, the principal at Soho Square, join the company’s Board of Directors.

Read more here.

Glasgow City Region

The Glasgow City Region and the North East of Scotland are due to benefit from a total £160 million cash injection to boost the economies.

“A rigorous process has been followed in selecting Glasgow City Region and the North East,” said Neil Gray, wellbeing economy secretary. “We will, of course, continue to invest in all of Scotland’s regions, for instance through Growth and City Region deals, to build on their strengths and stimulate jobs and growth.”

Each region will receive up to £80m over a five year period in the form of direct investment, tax reliefs, and other incentives according to the Scottish government. The decision aligns with the National Strategy for Economic Transformation to bolster innovation in critical sectors like net zero, digital tech, and life sciences.

Read more here.

The Scottish Government

The Scottish Government has unveiled a new multi-million pound investment that will seek to ‘unleash entrepreneurial talent.’

The wellbeing economy & fair work secretary said: “We have all of the raw ingredients necessary to match the leading European exemplars: a proud tradition of innovation and entrepreneurship, a university system that is the envy of the world, and exceptional capability in emerging industries such as clean energy, life sciences and artificial intelligence.”

A £17.5 million funding package will be delivered this year to in a bid to establish Scotland as one of Europe’s leading startup economies.

Read more here.

Cyber Scotland Connect

Cyber Scotland Connect (CSC) announces that they have received financial sponsorship from community supporters; ScotlandIS and Cyber Scotland, in partnership with the Scottish Government.

“We would like to express our utmost gratitude to ScotlandIS and Cyber Scotland for supporting the cyber community in Scotland, alongside all of their hard work and effort in making this possible. We are very excited at the growth opportunities this enables us to pursue, both by popular request from moderators, and the wider community; this includes a focus to expand our outreach by hosting and running events in different locations in and around Scotland,” read the release.

This sponsorship will support us to run more in-person events throughout 2023, and into 2024.

Read more here.

Deals and Acquisitions

iomart Group/ Extrinsica Global Holdings limited

iomart Group plc, a cloud computing company based in Glasgow, has agreed to acquire the whole of Extrinsica Global Holdings limited, a Microsoft Azure cloud solutions provider.

Extrinsica’s offerings include managed Azure Cloud, Azure solution design and implementation services, support and optimisation services and licensing.

The acquisition is in align with iomart’s “secure hybrid cloud strategy,” and will provide existing iomart customers with enriched skills to support their Microsoft needs, the company said.

Reece Donovan, CEO of iomart Group plc, commented: “We are delighted to welcome the Extrinsica team to iomart, providing a large step forward in iomart’s capabilities to support existing and new customers in their use of Microsoft’s Azure cloud platform.”

Read more here.