EDINBURGH-based venture capital firm Par Equity has today announced the launch of its new venture fund – Par Equity Ventures I LP.
The firm has secured a first close of £67m to boost innovative technology companies with high-growth potential in Scotland and the North of the UK. Par Equity will continue raising capital to close out the full £100m target fund size.
Backed by cornerstone funding from the Scottish National Investment Bank, Strathclyde Pension Fund, British Business Investments, the University of Strathclyde, several family offices and a significant number of Par Equity’s angel community, the fund is designed to accelerate some of Scotland and the North of the UK’s most promising tech scale-ups, providing necessary capital and strengthening the talent pools in the region.
The fund is a significant boost to the prospects of scale-up companies in Scotland, coinciding with a more challenging fundraising environment for tech firms. Access to funding was highlighted as a barrier to the sector reaching its full potential in Mark Logan’s Review of the Scottish tech ecosystem.
Helping to unlock that potential and the global competitiveness of Scotland’s technology sector, the fund will be managed from Par Equity’s Edinburgh office and will lead or support Series A funding rounds.
The venture capital firm seeks to partner with early-stage companies, operating B2B business models and with strong IP. Many of these companies are innovating in the fields of health tech, climate tech and industrial tech, often driven by new technologies such as robotics, photonics, advanced materials and artificial intelligence.
Launched in 2008 by Paul Munn, Robert Higginson, Paul Atkinson and Andrew Castell, Par Equity has invested over £160m into 77 early-stage technology companies to date, with 30 realisations, including Edinburgh-based Current Health, which was Europe’s second-largest digital health exit ever following its sale to Best Buy.
The launch of the fund will see Par Equity add further resources and capabilities to its existing offering as it seeks to build a better venture capital programme for companies across the north of the UK.
In line with its recent B-Corp certification earlier this year, Par Equity is committing to reinvest a substantial amount of its profits from the fund back into the tech ecosystem. Initiatives that are likely to be supported include increasing computer science participation in schools and improving gender representation in the tech sector.
On the fund’s launch, Paul Munn, Managing Partner at Par Equity said: “We are delighted to announce the fund to accelerate innovation in Scotland and the North of the UK. Championing Scottish talent has been our aim since we launched Par Equity, and we firmly believe in the potential to nurture successful leaders right here in Scotland.
Andrew Noble, Partner at Par Equity, who led the fund’s launch, added: “We are surrounded by incredible innovation, and we must now turn these fledgling start-ups into global category leaders. We look forward to working with these companies to unlock those ambitions.”
Jimmy Williamson, Executive Director at Scottish National Investment Bank said: “The Bank’s cornerstone investment will enable significant access to crucial scale-up funding to drive growth in the Scottish tech sector, delivering real impact by catalysing innovation and supporting the critical development of the locally-based venture capital industry.
“Working with Par and its new fund is complementary and additive to the Bank’s own direct investing activities and directly aligns with our mission to harness innovation, investing in the industries of the future.”
Scottish Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, Neil Gray said: “Increasing the investment available to Scottish businesses represents an important step towards achieving our vision of becoming one of Europe’s leading start-up economies. I welcome this announcement and recognise the benefits it will have both to innovative companies and our wider ecosystem.”
Mark Logan, Entrepreneurial Advisor to Scottish Government added: “Scotland’s tech sector produces an ever-larger number of high-quality tech start-ups, but the ecosystem has been previously constrained by a lack of focus on the region from VCs able to provide scaling capital.
“A key recommendation of the Scottish Technology Ecosystem Review was therefore to provide a major stimulus in this area through public-private partnership. That stimulus has just arrived, and it’s a breakthrough moment for Scotland. Par Equity has again demonstrated its commitment to supporting the nation’s start-up ecosystem through its leadership in securing this scale-up fund.”
Par Equity’s investment model combines its discretionary managed funds with the experience of its engaged pool of sophisticated angel investors. This hybrid investment approach is drawing attention from the industry, with the firm winning Best Angel Group of the Year (UK Business Angel Awards, 2021 and 2023) and Best EIS Manager of the Year (EIS Association Awards, 2021 and 2022), as well as being selected as a finalist for the upcoming European Private Equity Awards for Venture Capital House of the Year and Venture Capital Deal of the Year in 2022.