Scottish businesses continue to attract large volumes of venture capital (VC) investment despite a turbulent start to the year, according to new figures from KPMG.

The latest KPMG Venture Pulse Survey shows that VC investment reached £181 million during the first three months of the year, marking a significant increase on the £64 million raised during the same period in 2021.

This investment surge follows an impressive performance by Scottish businesses toward the end of last year.

In Q4 2021, 31 deals worth £97.6 million were recorded, bringing the overall investment in Scottish businesses to £626 million across the year.

Scottish VC investment

In total, 41 deals were completed during the first quarter. Edinburgh saw 20 successful investment rounds across this period, followed by Glasgow (11), Dundee (4) and Livingston (2).

Standout deals included £94 million raised by Edinburgh games developer, Everywhere and £12.25 million of 4th round funding for private bank Hampden & Co.

Meanwhile, £5m was raised by Glasgow based Katrick Technologies from Greenbackers Investment Capital.

Recommended

• DIGIT Deal Roundup | April 2022
• 53% of UK Google shopping ads still come from Google
• UK tech watchdog to get powers to issue multi-billion-pound fines

Commenting on the investment figures, Amy Burnett, KPMG Private Enterprise Senior Manager in Scotland, said: “Despite concerns around the uncertainty in the economy, and with interest rates rising, Scotland continues to demonstrate resilience and adaptability in attracting VC investment. Fintech, B2B-focused services and healthtech remain top areas of investment.

“The power of our disruptive businesses to deliver impact on a global scale is more important than it’s ever been, and our innovators are a real success story. The collective focus on nurturing and supporting the Scottish scaleup ecosystem is great to see.

“It will no doubt help develop more exciting businesses in cities across Scotland and attract further global VC interest and investment.”

Investment still flowing into London

Although the bulk of VC investment continues to flow into London (£5.2 billion), the rest of the UK also saw buoyant levels, with over £1.7bn invested across 334 deals.

In addition, data from Pitchbook shows that VC investment in UK innovators based outside of London has more than doubled since the pandemic, surging 59% from £3.3 billion invested in 2019.

Graeme Williams, M&A Director, KPMG UK, said: “A combination of a rise in corporate backed VC, more private equity funds looking for better returns, and increasing fundraising focused on earlier stage companies to achieve higher returns have helped contribute to a solid Q1 to build on moving forward.”