The report considers the risk capital market in the UK, assessing Scotland and benchmarking against the other regions and nations of the UK. It looks across deal sizes, sectors, regions and investor types.
Deal numbers and investment value fell in the UK and Scotland in 2023, in a continuation of the market downturn that took hold in second half of 2022.
£575m was invested across 354 deals in Scotland (a decrease of 41% and 17%, respectively), taking Scottish investment back to around 2019 figures, and deal count to around 2018 levels.
However, the Scottish market showed great resilience and the continued ability to attract significant investment, as outlined below:
Headlines – 2023 Calendar year
• Scotland remained the top performing region for investment value after the Golden Triangle.
• Investment in Scottish spinouts made up 32% of total Scottish investment, a higher proportion than the UK overall (10%).
• At £3.4m, the average deal size for Scottish spinouts was behind just the Golden Triangle (£6.5m), and higher than the average deal size across all deals in Scotland (£1.6m).
• The Scottish market above £10m saw the greatest decrease in both deal numbers and value (down 47% and 69%, respectively).
• However, the underlying market (deals below £10m), showed resilience, with investment down by just 2%, compared with the UK which was down by 13%.
• In 2023, no deals above £50m occurred in Scotland, whereas in 2022 two deals above £100m (£164m into GoFibre and £101.3 into TauRx) and one deal worth £50m (into Well-Safe Solutions) took place.
• Despite this, Scotland continued to attract large deals, with nine deals above £10m all of which were in the East and West of Scotland, which attracted the highest levels of investment in Scotland.
• There were 84 deal participations by PE & VC investors in Scotland, the highest amount after the Golden Triangle.
• Scotland also continued to demonstrate the strength of angel investment in the region, coming in after only London for the number of deals with Angel Network and Business Angel(s) participation (69 and 53 participations, respectively).
• However, investor appetite for new to equity investment continued to decline, with new to equity investment making up just 5% of total Scottish investment value. This is a continuing trend, falling from 2022 levels, and more pronounced than the proportion of new to equity investment in the UK (10%).
