BUSINESS angel investment in Scotland is on course to hit a record high this year in a development that suggests confidence in the prospects of early stage firms is strong amid hopes an economic recovery is underway.
Scotland-based angel investors led £70.24 million of investments in the first half of this year, putting them on track to beat the record annual total of £85.79 million set in 2019.
The total value of investments led by LINC Scotland members fell to £74.4m last year, during which the fallout from the coronavirus crisis may have made angels reluctant to commit to deals.
The latest figures, which were compiled by the LINC Scotland angel association, indicate that angels’ appetite for deals has recovered amid the easing of restrictions on activity that has accompanied the rollout of vaccines in recent months.
The rise in activity during the first half of this year will be welcomed by economic development bodies. The angel community is a valued source of funding for early stage firms that are seen as having high growth potential.
Angels have shown strong interest in firms operating in sectors which it is hoped will help power the growth of Scotland’s economy, such as technology and life sciences.
David Grahame, Executive Director at LINC Scotland, said the first half figures indicated the resilience of the Scottish business angel community.
He noted: “We see a strong willingness to invest in the future, with most of the funding going into high-potential technology focused businesses.”
The funding totals include the amounts invested by public bodies such as Scottish Enterprise and by other investors, alongside LINC Scotland members.
LINC Scotland members completed 48 deals in the first half. The number of deals completed fell to 97 last year, from 102 in 2019.
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LINC Scotland has 21 syndicates as members. These can draw on the resources of an estimated 2,000 investors. LINC Scotland reckons this allows them to make larger investments than individual angels acting alone and to support companies with sizeable follow-on rounds.
Scotland is seen as having a strong angel community.
Ian Mitchelmore, senior manager, Scotland at the Government-funded British Business Bank, said it was highly encouraging to see such momentum returning to the Scottish angel investment market.
The bank has provided funding for angel syndicates in Scotland.
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