Scotland’s tech sector accounts for almost half of investment in small firms
Scotland’s tech sector accounted for almost half of all equity investment in small firms last year, according to new figures.
Digital companies secured £124m from investors – a 44 per cent share of the equity market for SMEs – new data from the British Business Bank has revealed.
In total, 110 deals were struck with eastern Scotland securing the biggest share – 71 – compared to the south west (33), north east (5) and Highlands and Islands (2).
In terms of how that split between subsectors, software secured 40 deals totalling £43m, life sciences (32 deals) at £44.6m, ‘other’ tech (32) totalling £24.2m and hardware (6) totalling £11.9m.
Overall, analysis from the British Business Bank found that smaller companies in Scotland saw a total of £284 million in equity deals last year.
The number of deals in the tech sector grew by 16% in 2020 – exceeding the UK’s 12% increase.
Mark Sterritt, UK network director, devolved nations at the British Business Bank, said: “Last year saw a record number of small businesses receiving equity investment in Scotland, placing the country ahead of other parts of the UK with the exception of London. Our analysis suggests this has continued on into 2021, as the Scottish economy recovers and investor confidence returns.
“It is particularly encouraging to see the tech and life sciences sectors feature so prominently as destinations for investment. Scotland has a flourishing tech ecosystem and a vibrant life sciences sector, with a broad range of exciting and ambitious companies emerging across the country, with products and services that have global potential.
“The British Business Bank is aiming to support companies in both sectors, and beyond, with a range of initiatives. Among them, Future Fund: Breakthrough, a new £375 million UK-wide programme, is due to launch this summer, which will help address the later stage equity finance gap faced by innovative UK deep tech and R&D-intensive companies.”
Scotland’s share of small business equity investment deals has more than doubled over the last five years, from 5% in 2016 to 12% of the UK total. Activity has been boosted by a variety of exciting new companies emerging and support from the Scottish Government, with two-fifths (42%) of announced equity deals during 2020 involving a government fund.
The Bank said that last year’s strong momentum has continued into Q1 2021, with the total value of equity investment in smaller businesses across the UK reaching £4.5 billion – by far the highest amount ever recorded in a single quarter. Scotland accounted for £90.9 million of this figure.
Christie’s clarion call can’t wait another decade
Ten years ago, the Christie report set out an inspiring agenda for change that would put people at the heart of public services. Unlike many reports, it has shown remarkable…
Present Pal: A company built on accessibility
In the latest article about neurodiversity and tech from Skills Development Scotland, Chris Hughes of Present Pal says it’s really not as difficult as you think to accommodate neurodivergent talent….
Preparing students for global citizenship
I believe that the role of colleges in preparing our students to be global citizens has never been more critical. Why? We live in a world where we still need…
Alex Cole-Hamilton: ‘The digital divide hurts rural communities right across Scotland’
I believe that technology can transform our society. As the new leader of the Scottish Liberal Democrats, I want to see our country make things again and capture the imagination…
How neurodivergent talent can create a winning work team
In the latest column brought to you by Skills Development Scotland about the benefits and importance of taking on neurodivergent talent, Rebecca Wones from Lexxic gives us her expert opinion…
Developing a digital leadership pathway
The Scottish Digital Academy provides high quality professional learning and training to develop digital skills to support transformation and service design across the public and third sectors in Scotland. We…
Unlocking the power of rural areas with 5G
A golden key opens any door and 5G is the key to unlocking business efficiency and productivity as well as societal benefits to the stunningly beautiful and sparsely populated rural…