Venture Capital investment in Scottish scale-ups almost doubled in 2019, consistent with new research.
The Global Venture Pulse Survey reveals the quantity invested in Scottish fast-growth companies in 2019 reached £19.7 million, up from £10 million in 2018.
The increase was partly driven by a busy fourth quarter including a £66 million investment in Well-Safe Solutions to fund its next stage of growth as a well decommissioning company.
The latest data reflects a UK-wide surge in investments with quite £9 billion pumped into growth-hungry companies.
Later stage businesses, particularly within the financial services, biotech and healthcare sectors, drove the bulk of the deals completed.
On the international stage, 2019 saw a record number of VC-backed unicorns, (companies valued at $1 billion), with 110 new unicorns created globally, including the united kingdom ’s Babylon Health and Cambridge-based CMR Surgical.
The US accounted for quite two thirds of those unicorns, with 73 in total including Ripple, Bright Health, Duolingo, Scopely, and Next Insurance.
Europe set a replacement record, with 18 new unicorns in 2019 compared to 12 in 2018 and only six in 2017.
Brazil showcased its growing importance within the Americas with a record three unicorn births in 2019, including QuintoAndar, Loggi, and Wildlife Studios.
The breadth and variety of Europe’s VC market and growing innovation ecosystems continued to get on display this quarter, with six countries, including the UK, accounting for the highest ten deals within the region.
Europe shattered its previous annual high of VC investment, attracting $37.5 billion in VC investment in 2019 compared to $28.2 billion in 2018.
Germany, France, and Spain reached new annual records for VC investment in 2019.
Looking ahead to 2020, political and economic uncertainty is predicted to stay fairly high in several regions.
VC investment across Europe is predicted to stay strong, and while the IPO market may even see some increased activity, M&A and therefore the trend to remain private longer, will likely still dominate.
Late stage deals with attention on companies who have strong business fundamentals and sustainable global growth models will still lead the way.
Amy Burnett, manager with KPMG Private Enterprise in Scotland said:
It’s been an incredible year for Scotland’s scale-up businesses.
Despite the political uncertainties, entrepreneurs have attracted investment from everywhere the planet , closing significant deals and drawing the eye of VC investors focused on later stage companies.
While it’s an overwhelmingly positive picture, there's some concern that early and seed stage deals aren’t always getting the support they have to grow, which could slow innovation within the long-term and put Scotland at a competitive disadvantage.
But, right now, we’re during a healthy, confident position with strong investor appetite.
The Global Venture Pulse Survey produced by KPMG Private Enterprise. It includes a snapshot of deals data available as of 6 January 2020.
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