Scottish start-ups have received almost £17 million less from investors in the second quarter of 2019 compared to the sum injected at the start of the year.
Figures from KPMG’s Venture Pulse Survey showed more than £23.8m of Venture Capital (VC) was invested during Q2, with the bulk of funds being spent on technology and healthcare businesses.
But the figures, compiled by Pitchbook, reveal that while deal volume is up funding value is down, with investors becoming increasingly risk averse as political and economic uncertainty continues.
The latest data reveals investment dropped by more than £16.8m compared to Q1, but the number of businesses attracting funding support has increased from 14 to 16.
The start-ups benefiting this quarter included Aberdeen-based Enterobiotix, which attracted more than £2.4m to help it develop pioneering new medicinal products to prevent bacterial infections.
The bulk of VC investment this quarter focused on Edinburgh, with eight businesses attracting support. Elsewhere, funding was provided to five companies in Glasgow, two in Aberdeen and one in Dundee.
UK-wide, VC investment was also down with 279 deals valued at £2bn completed during Q2 compared to 324 in Q1 valued at £2.4bn.
James Kergon, head of deal advisory at KPMG in Scotland, said: “While it’s reassuring to see such a wide range of Scottish businesses attracting VC investment, the dip in funding levels is slightly concerning. Whether they’re early-stage start-ups, or long-established businesses, every one of the 16 companies is doing something innovative and, in some cases, truly pioneering. The future success of the Scottish economy relies on a diverse ecosystem led by entrepreneurial companies. However, there is hope on the horizon. While investment is down, it’s clear to see that, despite deepening economic uncertainty, venture capitalists remain attracted to Scotland’s tech savvy, globally-focused start-up community.”
