Celebrating Success and Moving Forward!

We have reached a very significant milestone – Scottish Enterprise’s early-stage co-investment activity has leveraged over ￡2bn of private sector investment into early-stage, ambitious, high growth Scottish companies since the introduction of our first co-investment fund in 2003 - no mean feat!

It was fantastic to welcome our Cabinet Secretary for Finance and the Economy, Kate Forbes and our CEO, Adrian Gillespie, to Edinburgh based biotech start-up MiAlgae this morning, ?a company we have supported since its early stages through both our specialist advice and equity investment. MiAlgae applies leading advances in science and technology to improve food security and reduce the impact on the planet, supporting Scotland’s journey towards Net Zero. ?The company secured investment from Scottish Enterprise and our co-investment partner, Equity Gap, alongside investors Old College Capital and Hillhouse Group, to support commercialisation of its revolutionary microalgae product, expand its premises, bring in even more talent and commission a new, larger demonstrator plant in East Lothian. We were delighted to support the business during the pandemic with funding from our Early-Stage Growth Challenge Fund (developed to support the early-stage market dealing with liquidity challenges), allowing the business to continue on its growth journey despite the economic challenges we all encountered during that period. ?

In providing co-investment to ambitious early-stage companies like MiAlgae, alongside a diverse range of domestic and international investors, we are proud to have played a catalytic role in growing Scotland’s risk capital market from around ￡100m in 2003, to nearly ￡700m today. Scotland is now widely recognised as having a strong and growing risk capital market, consistently placed in the next quartile after London and surrounding regions, reflected in the mix of investors active in Scotland and the calibre of companies now able to attract ￡10m plus rounds and international VC investment. ?Scottish Enterprise has invested over ￡770m into early-stage Scottish businesses delivering ￡6 of economic impact for every ￡1 invested through increased investee company productivity, turnover, and international sales?through?new technologies, innovation, and innovative business models - and that’s before we consider the substantial income generated from the portfolio which supports future economic activity, more on that next time…

The appetite of our co-investment Partners to support the early-stage eco-system is pivotal in building on Scotland’s strengths, responding to societal?challenges and Scotland’s drive towards Net Zero.?Our own role is not just about co-investing and responding to gaps in the finance market for these early-stage businesses, it is also about building on our partnerships, providing financial readiness advice and using?knowledge, expertise, and advice from across Scottish Enterprise to maximise the competitiveness of our SMEs on an international stage.??

I always enjoy demonstrating our work through real live examples but as one of the most active early-stage investors in the UK it is incredibly difficult to select?just?two, a self-imposed limit in this blog!?I’ll start with Speech Graphics who presented at the recent EIE London showcase ?event and I was blown away by their technology. They are a spin-out of the University of Edinburgh’s?world-renowned School of Informatics providing?pioneering facial animation technology for the entertainment industry, with clients such as Warner Brothers, Microsoft, and Square Enix.?We have invested ￡1m through our?Scottish Co-Investment Fund ?and the Early Stage Growth Challenge Fund, alongside partners Archangels and Par Equity with ￡5m of growth investment secured from US-based Investor Sands Capital Ventures in the recent Series A round allowing the management to really accelerate growth.

?Another really exciting company that joined our portfolio in 2020 is life sciences business Carcinotech , a MedTech specialist in the manufacture of 3D printed tumours developed from cancer stem cells, primary cells, and established cell lines, to provide a platform for rapid, ethical and accurate drug discovery, screening and pre-clinical testing. The business has recently secured a ￡1.6 million investment from Scottish Enterprise via our co-investment fund alongside partners Tricapital who led the investment round, Eos Advisory, SIS Ventures, Gabriel and Alba Equity. Carcinotech which is based at the Roslin Innovation Centre on the outskirts of Edinburgh, already has partnerships in place with industry organisations like Cancer Research UK, global pharma groups and a major US-based clinical research organisation (CRO). Their recent funding round will help CEO and founder Ishani Malhotra (who was recognised as one of Business Insider’s 2021 Rising Stars ) to accelerate commercialisation through extending its commercial partnerships in Europe and North America over the next twelve months.

?When we launched the Scottish Co-investment Fund in 2003 the Scottish Enterprise investment team were a very small (but perfectly formed!) team, new into the investment market developing an innovative strategic approach to stimulating Scotland’s risk capital market.?In 2022, we are a much bigger, much more experienced team, with many funds and initiatives under our belt, continuing that good work and striving to do more every day to make an even-bigger difference to Scotland’s future economy, as we face into the challenges - and the opportunities - of the future.?

Whilst we have reached a pretty significant milestone, there’s no rest for us - 2022 is already shaping up to be a busy one. ?Let us continue to work together, or work together for the first time), as we support Scotland’s high growth early-stage businesses to continue to make a difference.?

For more information on our early-stage equity co-investment funds, our loan scheme and Financial Readiness support please visit www.scottish-enterprise.com/investment

(photo): Adrian Gillespie, CEO, Scottish Enterprise, Kerry Sharp, Director, Scottish Enterprise, Cabinet Secretary for Finance and the Economy, Kate Forbes, Simon Best, Director, MiAlgae, Douglas Martin, Founder & MD, MiAlgae)