KPMG: Venture capital investment in Scotland increased during the block
Venture capital (VC) investments in Scottish scale-ups remained robust and robust in the second quarter of 2020 as the number of transactions during the lockout increased despite growing economic and political uncertainties.
The latest data from KPMG Private Enterprise's Global Venture Pulse Survey found that 22 VC deals were closed in Scotland between April and June this year, compared to 18 in the first quarter of 2020 for a total of at least £ 62m versus £ 32m in the first quarter.
Edinburgh-based growth-hungry scale-ups were the top beneficiaries of funding this quarter with a total of 13 deals, followed by Glasgow with two deals.
The largest deal was in Aberdeen-based NodThera, which provided nearly £ 44 million in risk funding to support clinical trials and ongoing drug discovery efforts in the treatment of chronic inflammation-related diseases.
Amy Burnett, manager at KPMG Private Enterprise in Scotlandsaid, "The scale-up sector in Scotland has been flourishing for some time, but growing political uncertainty surrounding Brexit and the sudden onset of the coronavirus pandemic threatened to stop investment entirely. The latest data strengthen the resilience of the country's growth-hungry tech scale-ups and investor confidence in the Scottish market.
"While the numbers are reassuring, what lies ahead is still very nervous. We have been warning for some time that early and seed stage deals could be the greatest victim of future uncertainties that have far-reaching consequences for long-term growth and would have been innovative, but the mood is generally positive right now. Both scale-ups and investors seem determined to weather the storm. ”
Across the UK there were 355 transactions with a total value of £ 2.6 billion, compared to 472 transactions with £ 2.8 billion in the first quarter of 2020. The decrease is the lowest number of transactions completed since the second quarter of 2013.
Tim Kay, director of the KPMG Private Enterprise Emerging Giants teamadded: “In a quarter that saw global lockdowns, economic contractions and a unique health crisis, investments were expected to be hit hard, but Europe and especially the UK venture capital market remained remarkably lively.
“Although the half-year figures for 2020 do not match the highs of 2018, they are cheap compared to 2019 at almost USD 63 billion worldwide, although the business figures continue to decline as COVID-19 accelerates the trend towards later, larger stores throughout the year .
“E-commerce, cyber security, business software and healthcare have increased demand and pipelines. This is not a short-term response – the normalization of disruptive technology will continue. A positive result in an incredibly challenging time. The rest of 2020 will undoubtedly be difficult as the economic impact continues, but venture capital has so far remained remarkably optimistic, and can remain so for a long time to come. "
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