Venture capital funding boost

Scottish companies raised £21 million in the second quarter of 2018, two-and-a-half-times more than in the previous three-month period, according to new figures.

KPMG’S Venture Pulse report, which highlights key trends, opportunities, and challenges facing the venture capital market, shows that healthcare and biotechnology companies were responsible for £17m of the total investment in Scotland.

Standout deals included £10m raised by Edinburghbased Adorx Therapeutics, a drug discovery company, and £6m by 3F Bio, which creates sustainable protein from renewable sources.

The regional trend mirrors the UK story, which also saw healthcare and biotechnology driving some of the top deals,

In total, some £1.55 billion of venture capital was invested in UK businesses across 244 deals in the last three months, with late-stage financings responsible for the majority of capital invested.

The UK also accounted for six of the top ten European deals, including Revolut (£188m) and Freeline Therapeutics (£90m).

James Kergon, head of transactions services for KPMG in Scotland, said: “Investment in Scotland has bounced back following a hesitant start to the year. As we’ve seen in previous months, the country’s biotech scene continues to attract investors as it is well established and home to a number of promising startups.

“Nevertheless, the number of early stage funding deals is falling across the UK and Europe, as investors continue to focus on later stage investments in businesses with a proven track record. This doesn’t, however, mean backers are avoiding start-ups entirely.

“The strength of the Scottish market is encouraging, particularly when you take into account current economic and political pressures facing businesses domestically.”