A record year for Scottish equity investment

22 May 2023 | 3 minute read

Scotland's record risk capital performance

Scotland’s risk capital market saw record levels of equity investment in 2022. This success means Scotland was the top performing region in the UK outside London and the two surrounding regions of the south-east England and the east of England (collectively known as the Golden Triangle).  

Our new risk capital market report, ‘Investing in Ambition: Scotland’s Equity Risk Capital Market 2022’, shows a total investment of £953 million in 407 deals in 2022. This is compared to £754 million in 424 deals in 2021.

Large deals have been particularly impactful on Scotland’s impressive performance. Three such deals took place in 2022: £164 million was invested in GoFibre, £101.3 million in TauRx Pharmaceuticals and £50 million in Well-Safe Solutions. 

Scottish companies attract investment from a diverse investor base

In 2022, Scotland’s companies continued to attract significant international investment. Private equity and venture capital firms participated in 87 deals, with a total deal value of £428 million in 2022 — the strongest UK performance after the Golden Triangle.   

Scottish university spinouts also saw record investment levels in 2022. This type of investment increased 53% on the previous record set in 2021. The number of deals into Scottish spinouts was also strong, with only the south-east and London recording more deals than Scotland. 

Scotland once again benefited from the activities of its well-established and supportive business angel groups. In 2022, Scotland was second only to London in the UK for attracting deals from this investor type.

Early-stage investment: challenges and next steps

Although Scotland’s risk capital market performed well in 2022, some challenges still exist in the market.

Investor sentiment affected market activity in the second half of 2022. This is likely to continue into 2023. Many equity investors are showing signs of changing their risk appetites.

Despite the value of first-time equity deals in Scotland increasing in 2022, these deals still made up just 10% of market value in Scotland. This is similar to first-time deal value in the UK overall, which was at 11% in 2022.

This highlights the continued need to support early-stage businesses in securing the patient capital and expertise needed to help them start up and fuel their growth.