TLDR:
- VC investment in Scottish firms nearly halved in 2023 compared to previous years.
- The Venture Pulse Survey by KPMG showed a decline in global VC activity in 2023.
A recent report by KPMG revealed that Scottish firms received over £359 million in venture capital investment in 2023, marking a significant decrease from the record funding levels seen in the previous two years. The Venture Pulse Survey highlighted a total of 115 Scottish firms that received investment throughout the year, with a total of 45 deals amounting to just over £71 million in the last quarter of 2023. Deals were mainly concentrated in major cities like Glasgow, Edinburgh, and Dundee.
Key standout deals included investments in alternative meat startup ENOUGH, Manus Neurodynamica, and Fintech firm DirectID. Graeme Williams, head of corporate finance M&A for Scotland at KPMG UK, noted a slowdown in VC activity in 2023 compared to previous years, attributing it to investor caution and geopolitical complexities. However, he expressed optimism for stable investment levels in the future.
London dominated UK VC investment in 2023, raising £10.7 billion across 1,495 deals, although this was considerably lower than the previous year. Amy Burnett, KPMG private enterprise senior manager in Scotland, emphasized the focus on emerging technologies such as cleantech and AI, highlighting Scotland’s strength in IP-rich businesses spun out of universities.
Despite market adjustments, there is hope for Scottish businesses in raising venture capital, with a renewed focus on sustainable and profitable models. The report suggests a positive outlook for Scotland’s talented founders seeking investment in the coming years.
