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Strong levels of international equity investment in 2016 illustrate the continued appeal of Scottish companies to investors around the globe.

Attracting international investment

Trends in the investment market

During 2016 we continued to see venture capital and institutional investors from overseas targeting and investing into Scottish companies. 

This investment in Scotland’s ambitious companies is encouraging given the increased caution investors have been showing globally, with longer decision-making time and an increased appetite for lower risk and later stage opportunities. 

There was a decline in the total equity invested into companies in the UK during 2016, falling back from the highs achieved in 2015 and this was consistent with global trends.

In 2016, Scotland’s companies secured £336 million, the second highest investment total recorded since 2001. This total included £153 million of Venture Capital "VC" investment. 

Scotland’s risk capital market also experienced the highest number of investment deals on record – 285 deals, a 33% increase on the year before. 

Strong performance in Scotland

The performance of the Scottish market is strong and when compared to the rest of the UK, we are the next best region for companies securing equity investment after London and the South East of England. From 2012 to 2016, VC and Institutional Investors invested just over £1 billion across 272 deals in Scotland.

A further positive trend is the number of Scottish companies securing “mega deals”, that is deals above £10 million. Since 2012, there have been 16 investment deals of over £10 million into Scottish companies that are making their mark internationally, including FanDuel, Skyscanner and BrewDog who have each raised multi-million pounds of investment.  

Scottish Enterprise’s investment arm, the Scottish Investment Bank, continues to perform a key role stimulating the market and during the year we worked with companies to help them raise investment from international investors. This included the corporate venture arms of IKEA and Shell,  VCs such as Sofinnova Partners from France, Temasek from Singapore and many high net worth individuals. 

Find out more about the support that is available. 

View our investment services

Where is investment coming from?

Scottish companies secured investment from geographically diverse investors including from Asia, North America and Europe.  

As well as critical funding, these international investors bring new skills and expertise to the companies they invest in. The introductions they provide to global networks and management expertise, together with access to new and growing markets can really provide the support companies need to progress to the next level of development. 

One of these companies is TC BioPharm, which specialises in developing and commercialising innovative cell-based products for treatment of cancer and viral infections. 

In September 2016, TC BioPharm successfully secured investment from Nipro Corporation, a Japanese medical equipment manufacturing company and the Scottish Investment Bank. This funding has supported the expansion of facilities and progression of further product development. 

Along with other companies in our portfolio, TC BioPharm has benefited from our non-executive director programme through the appointment of a highly experienced individual to the Board of the company.

Healthy interest in tech sector

Within the growing Scottish ICT sector we continued to see increased interest from VC investors – with over 80% of total VC equity funding secured during 2016.

The Scottish ICT sector is clearly taking advantage of the £153 million VC investment that came to Scotland from overseas during 2016. This demonstrates just how important it is for companies to think about different sources and locations when looking to raise that all important finance for business growth.  

Companies such as Design Led Products who secured support from IKEA Greentech have been doing just that, very successfully. In 2016 Design Led Products secured further investment from IKEA Greentech when they invested alongside SIB, in a funding round of £3.4 million

Investors' targeted approach

Globally we have seen a rise in the amount of investment that corporate venture investment arms of large companies are making, as they continue to recognise the importance of future proofing their businesses and investing in innovation. 

Several international corporate investment arms showed their interest in Scotland with investments from Iceland, Spain, Sweden and Switzerland to the USA and on to China and Japan. This includes large corporations such as ABB Technology Ventures, covering a wide range of market sectors and others such as BP and PhageLux with a very specific sector focus. 

It's clear that these international corporate investors are targeted in their investment approach and selecting the very best opportunities, and in many cases investing for the first time into a Scottish company.  

Supporting success

Scottish Enterprise is focused on equipping companies like yours to stand out from the crowd and compete for mobile international investment. 

Providing follow-on funding for our investment portfolio and helping companies secure increasing amounts of international risk capital is critical to launching and growing ambitious companies with the export potential needed to grow Scotland’s economy.   

Successful fundraising requires hard work and determination. Scottish Enterprise provides a range of support to help you navigate what can often appear to be a complex funding landscape. This includes support to help you become investor ready, and importantly to consider the type of finance that best meets your needs. 

Find out more about the support that is available. 

View our investment services

If you're an investor interested in finding out more about investing alongside SIB or in Scottish companies, or a company looking to raise funding for your next stage of growth, get in touch with the Scottish Investment Bank