Brexit and coronavirus fail to dampen deal activity in Scotland

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FINANCIERS have increased investment in Scottish firms that are seen as having good growth potential in spite of the uncertainty caused by the coronavirus crisis, sector watchers have found.

KPMG said firms in Scotland raised around £100 million venture capital investment in the quarter to December 31, compared with £71.6m in the preceding three months.

The figures suggest investors’ confidence in firms’ prospects was not badly dented by concerns about the impact of the coronavirus or that the UK could fail to reach a trade deal with the European Union in time.

Glasgow investment business says it’s in the market for deals 

An agreement was signed on December 30, the day before the end of the Brexit transition period.

Amy Burnett, Senior Manager with KPMG Private Enterprise in Scotland, said:

“While Scotland’s share of the UK VC investment space remains relatively low, it’s absolutely clear that there’s a real appetite for supporting the aspirations for Scottish scale-ups.

Ms Burnett said investors are focusing on some of Scotland’s most promising sectors, citing energy decommissioning, clean energy, technology and life sciences.

She added: “Entrepreneurial businesses with a clear vision and strategy are riding out the current storm and laying down roots for sectors that could produce significant financial gain and sustainability in Scotland’s future economy.”

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The total value of deals concluded in the fourth quarter in Scotland was swollen by two relatively big transactions.

The Well-Safe Solutions decommissioning business secured more than £33m. Orbex raised almost £24m to support the development of a satellite launching spaceport in Sutherland.

The total number of deals completed rose to 23 from 17.

KPMG said: “The UK was the jewel in the European crown for attracting VC investment during Q4 with six of the top 10 largest European deals involving UK scale-ups.”

These included digital health business LumiraDx and financial software company Molo, which are based in London and Bristol-based artificial intelligence specialist Graphcore – which raised $950million (£700m) between them.

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The value of investments in Scotland in the fourth quarter was in line with the same period in 2019, during which 16 deals were concluded.

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