Scots tech firms underpin venture capital sector but overall market cools

0 Sam Subesinghe: Scottish tech scene ‘well-established’ Scottish technology firms were responsible for the majority of all venture capital raised north of the Border in the first three months of 2018, new research has shown.

Figures from KPMG’S Venture Pulse report, which highlights key trends, opportunities, and challenges facing the venture capital market, reveals that $8.5 million (£6.3m) out of a total of $11.3m was raised by businesses in Scotland’s tech sector.

However, following a record 2017 which saw more than $4 billion invested into UK companies, total venture capital investment in Scotland – and the rest of the UK – slowed in the first quarter of 2018.

In Scotland, standout deals during the period included £2m raised by tech outfit Mindmate, and Lendingcrowd, the peer-to-peer investment platform, which raised £3m.

The latest figures reflect findings from KPMG’S 2018 Global Technology Innovation report, which revealed that the UK is the fourth most promisingmarketintheworld for innovation, disruption and technology breakthroughs – behind only the US, China and India.

Sam Subesinghe of KPMG in Scotland said: “VC investment in Scotland slowed in the first quarter as investors focused on smaller numbers of later stage deals.

“Brexit is cited as the main reason for this, but while overall investment has dropped, the tech sector continues to grow. Scotland’s tech scene attracts investors as it is wellestablished and goes hand-inhand with a strong financial services sector.

“Additionally, the country’s university infrastructure means there is a strong supply of highly-skilled graduates emerging. Investment in the tech industry will continue to play an important role in the UK’S growth strategy.”