The bank that likes to say: ‘Can we get more money for tech firms?’
Lots of money is flowing into the tech sector. But is it enough? The head of the Scottish Investment Bank is about to find out
The Scottish Investment Bank has revealed plans for a market consultation exploring how the public sector investor can help tech firms seeking access to seed capital.
The SIB, which is the investing arm of Scottish Enterprise, will go out to the sector in Q3/Q4 this year to discover how it can better assist tech firms needing finance to expand. Currently, the SIB takes a sector neutral approach when it invests in companies in Scotland, although it has given some specific support to life sciences and renewables.
“We have a digital technologies team who from a sector point of view are constantly trying to work out what that sector needs,” says Kerry Sharp, head of the Scottish Investment Bank. “From an investment point we’re not taking a different approach to our generic co-investment funding because we’re not sure it’s needed just now but it is one of the areas we are about to consult with the market on what’s happening.”
She adds: “There’s still lots of money flowing in [into tech] but is it enough? And if not do we as the public sector need to be doing something else to finance it? I know there are a lot of individuals out there who think something more should be happening and that’s what we do, we keep our ears to the ground. If we find that people feel there might be something, then that’s when we go into a wider consultation; if it’s anecdotal it’s difficult for us to do too much about it.”
The consultation is likely to be driven by Scottish Enterprise, initially with key market players, and Sharp echoes the investment community’s call to try and encourage more outward investment into Scotland.
“We just want to make sure there’s not a glass ceiling there or that there are still more companies not getting the funding because it’s scarce. So we’re trying to work out whether there are other responses that we need to do like trying to encourage other VCs to move into Scotland, or whether we need to encourage funds to set up here that we can invest into.”
In terms of risk capital the SIB runs two investment funds – the Scottish Co-Investment Fund and the Scottish Venture Fund, although it is more active in the former where it partners with many of the most established investors from the angel community. The model is built around joint public-private sector investment.
Sharp says the SIB deals with more than 100 investors and recent analysis has shown in the last three years that 40% of investment has come from outwith Scotland. Sharp wants to increase that to 50 or 60%, giving Scotland’s economy the benefit of scale as well as international experience and knowledge; although she is cautious about not wanting companies to be “grabbed out of Scotland, and moved elsewhere”.
“Although acquisition can be good for a company, and it allows them access to additional capital and allows them to grow, we want them to do that in Scotland.”
SIB has invested in:
- Clear Returns – software for retailers – £175,000
- Cloudsoft Corporation ltd – cloud application management – £1.5m
- Sumerian Europe Ltd – IT capacity planning – £3.2m
- Administrate Ltd – Training company software – £900,000
- Big data for humans – Customer analysis software – matched funding with Techstars incubator
- ImetafIlm – Digital film – secured £217,000 funding package from Kelvin Capital and SIB
- Bloxx – real time Internet and email filtering – exited after shareholder sale to US-based Akamai Technologies Inc in October 2015.
Why 2022 will be a significant year for digital learning
In 2022 the impact of technology in the classroom shows no sign of abating. The ‘pandemic years’ have proved critical in providing impetus for weaving and integrating powerful digital tools…
On the cyber horizon: predictions for 2022
As 2021 draws to a close, we see a world still challenged by Covid-19, necessitating new business models, new channels and a shift (perhaps for the long term) to remote…
Jude McCorry: “Focus on cyber strategy alone is not enough”
The number of cyber attacks has been on the rise since the start of the pandemic, with both international and domestic cyber criminals taking advantage of our increased reliance on…
Not a drop wasted: digital cask filling can save the whisky industry millions
Scotland’s food and drink sector is central to the country’s economy. Bringing in around £14 billion every year, it employs more than 115,000 people and accounts for one in five manufacturing…
The value of engineering in the curriculum
If you were to look back at the greatest discoveries in science and technology over the past 30 years, you would soon notice that engineering is a key catalyst for…
Glasgow Council leads the way in digital learning
In 2017, we at Glasgow City Council took the opportunity to overhaul our digital approach to education and redefine learning, keeping in mind the core aim of reducing the impact…
Why data is the new oil
In 2006, British mathematician Clive Humby coined the phrase, “Data is the new oil”. This analogy has been proven correct as data now powers entire industries and holds tremendous value…
Global Entrepreneurship Week offers chance to reset aspirations amid new innovation landscape
With the advent of Global Entrepreneurship Week, it is an opportunity for us to celebrate the innovators, the grassroots risk takers who drive the economy, and those who invest in…