Unsurprisingly the majority of 2017 Scottish venture capital deals appeared in the three largest cities, Edinburgh, Glasgow and Aberdeen – with the split in number of deals reflecting the populations of these cities.
Top local authorities in Scotland by number of equity deals in 2017
Edinburgh City Council – 142
North Lanarkshire (bordering Glasgow) – 22
Aberdeen City Council – 19
Midlothian Council (bordering Edinburgh) – 14
Aberdeenshire-based BrewDog’s funding rounds dominated during the year having raised £213m last April from US private equity firm TSG Consumer Partners who bought 22% of BrewDog giving the 10 year old company a £1billion valuation.
This activity contributed to Aberdeenshire’s unusually high showing in the equity finance ranking tables.
Top local authorities in Scotland by value of equity deals in 2017
Aberdeenshire Council – £295m
Edinburgh City Council – £99m
Glasgow City Council – £51m
Aberdeen City Council – £36m
North Lanarkshire Council (bordering Glasgow) – £21m
Of Scotland’s five largest VC/PE deals in 2017, four out of five went to Aberdeen-based companies. The other three apart from BrewDog all operated in the oil and gas sector.
Even If you remove BrewDog’s round, Aberdeen/Aberdeenshire companies still drew in more equity finance than those in the Glasgow and Edinburgh city councils over the same period.
One of Edinburgh’s most ambitious high-growth company seems to be a potential competitor to BrewDog’s craft beer empire – Innis & Gunn.
Valued at £45m in 2016, Innis & Gunn has seen its turnover swell from £12m to £22m over the 2014 – 2017 financial period. In 2017 they followed BrewDog’s precedent and took on £15m of funding from L Catterton, an American private equity firm.
Looking specifically at Scotland’s tech scene, the funding picture changes somewhat. Aberdeen drops of the ranking table, which is dominated by Glasgow and Edinburgh. Out of the two, Edinburgh is the clear leader, taking in nearly double that of Glasgow in 2017.
Top local authorities in Scotland by value of software equity deals in 2017
Edinburgh City Council – £37m (67 deals)
Glasgow City Council – £21m (37 deals)
Perth and Kinross Council – £3m (2 deals)
Stirling Council – £3m (4 deals)
Dundee City Council – £1m (3 deals)
One of Edinburgh’s most exciting young tech company is healthtech startup Care Sourcer. Their online platform allows users to search for a variety of care services in their local area. Care sourcer raised £8.5m earlier this year, in a round that valued the company at around £20m.
One of Glasgow’s leading tech startup is Smarter Grid Solutions, a cleantech software developer and spinout from the University of Strathclyde.
Their software products are designed to help electricity grid owners manage new challenges presented by a “distributed energy market” (i.e., an energy market where electricity is generated via lots of smaller generators, like wind farms, instead of a few big generators, like traditional power stations).
The top 5 backers of equity finance deals in Scotland, 2017
Scottish Enterprise – 121
Par Equity – 17
Archangels – 15
Equity Gap – 11
Tri Capital – 10
Scottish Enterprise’s high level of involvement in Scottish deals should come as no surprise: they participate in many deals through the co-investment mechanisms run by the Scottish Investment Bank. The next four most active investors are angel networks, which demonstrates the continued strength of angel investment in Scotland.