Venture capital investment in Scottish scale-ups more than doubled last year, according to new figures from KPMG. 

Statistics from the latest Venture Pulse Survey reveal Scottish scale-ups raised £626.9 million in venture capital funding across the year, marking a 136 percent increase on the £265.2 million raised in 2020. 

Scottish scale-ups also finished the year on a high with £97 million in VC investment secured in the final quarter.

However, this does mark a decrease in funding compared to Q3, in which £197 million flowed into businesses. 

In total, 32 deals were finalised in Scotland between October and December 2021, with stand-outs including a £42.2m Series B funding round for Intelligent Growth Solutions and a £7m seed raise for Edinburgh-based biotech startup, Macomics. 

Notably, over half (17) of Q4 investment deals involved businesses from the capital, further highlighting Edinburgh as a prime location for investment. 

In a recent study from business magazine  Management Today, Edinburgh was ranked the best city for business outside London. 

The report hailed Edinburgh as a “vibrant, future-facing city” which boasts a strong economy, skilled workforce and a leading track record of innovation.  

KPMG data also shows that Glasgow businesses secured four sizable investments as the city continues to cultivate a reputation as a key innovation hub. 

Meanwhile, Aberdeen and Dundee both saw three significant investment deals across 2021.

In July 2021 Dundee-based delivery service Snappy Shopper raised £19.4m, one of the Scottish tech sector’s largest rounds of the year.

Led by Kelvin Capital, the deal saw pledges from a range of new and existing investors, including Maven Capital Partners, Scottish Enterprise and former Sainsbury’s CEO, Justin King.

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While the majority of VC investment continues to flow into London, the rest of the UK saw buoyant levels of funding, with over £8.1bn invested in regions across the UK. 

In particular, Scotland accounted for 2.5% of the UK’s record £26bn haul of VC investment last year.

Amy Burnett, Senior Manager with KPMG Private Enterprise in Scotland, said the survey highlights a growing interest in Scottish businesses among global investors.  

“2021 has been a fantastic year for VC investment in Scotland, and shows that investors know that there’s life outside of London,” she said. 

“The gaze of investors has steadily been drawn north in recent years, and that’s been particularly true since the pandemic as homeworking has changed the dynamics of access to talent, the growth to scale ups, and of course deal making,” Burnett added. 

Graeme Williams, Director of Corporate Finance M&A at KPMG noted that investment in businesses across a broad range of industries further showcases the nation’s growing appeal.  

“Investors continue to zone in on Scotland’s most promising sectors – from energy decommissioning and clean energy to technology and life sciences – seeing sustained investment throughout the year,” Williams explained. 

“With renewables and life sciences still high on the radar for VC investors, world-leading regions such as Scotland should continue to attract large volumes of investment in these areas this year.”

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