Kerry Sharp, director of Scottish Investment Bank, has reported some key figures from its investment performance in 2019/20
“Scottish Enterprise has published its year-end results for 2019/20 and I’m delighted to share with you some of the Scottish Investment Bank’s key stats. Our funding support to some of Scotland’s most ambitious companies for 2019 – 2020 reached a record high of £76.2m, leveraging £272m of private sector investment, with over £75m from international investors.
“Our equity co-investment funds which focus on the early stage risk capital market – the Scottish Co-investment Fund and the Scottish Venture Fund – together invested over £40m alongside £106m from a range of private investors, from angels to Venture Capital to corporate investors.
“The Energy Investment Fund (EIF), which we deliver on behalf of Scottish Government, provides flexible equity and debt for energy projects in Scotland that will facilitate, catalyse and accelerate Scotland’s transition to a low carbon economy. During the year, EIF invested £9.9m and leveraged £19.8m of private sector funding. This funding has been integral to delivering projects which are scaling up new energy technologies, creating new Scottish supply chains, delivering financial benefit for Scottish communities and supporting the Scottish Government’s circular economy objectives. In addition, strong performances by companies within EIF’s existing portfolio meant that income of £13.1m was generated in the year, driven by several early exits. This income can, in turn, be recycled for the benefit of the Scottish economy.
“Last year was the first full year of the Scottish Loan Scheme, during which we supported 15 companies with over £6m of funding.
“Last year was also a great year for generating income for the public purse with £49m brought in from our investment activities. Just one example was our successful exit from deltaDNA Ltd alongside our long standing co-investor Par Equity following the acquisition of the Edinburgh-based analytics business by Unity Technologies the video game software development company based in San Francisco, California. After many years of collaboration, the acquisition was a great fit as the combination of these two leading businesses in gaming and data literacy creates a range of services that will make games more appealing to gamers in a sector that Scotland continues to excel in.
“Our financial readiness service actively supported over 390 companies last year in understanding and navigating the funding landscape, and supporting them to become funder ready to access growth funding.
“Whilst I am delighted that last year we were able to again support so many of Scotland’s high growth innovative companies, as every one of us is acutely aware, the landscape has dramatically changed since. We are now operating in truly unprecedented times and as well as this pandemic impacting on the health and lives of so many, it has left many companies with great uncertainty over their future plans. To help alleviate some of the pressure, I have been (and remain) involved in many conversations with businesses, investors, Scottish Government and SE colleagues, to consider the COVID-19 funding support schemes and what further support can be designed and introduced to address critical gaps in Scotland’s risk capital market and support in Scotland’s recovery.
“The Scottish Government has announced several funding support schemes and the importance of investing in Scotland’s entrepreneurs and innovators was confirmed with the announcement of the £38m early stage response package of support in July. The £25 million Early Stage Growth Challenge Fund was a core plank of that announcement which the Scottish Investment Bank designed and we are currently delivering. The Fund has been established to support early stage companies, severely impacted by COVID 19, to deliver additional research and innovation activity, and importantly those that can make a direct contribution to Scotland’s economic recovery. The Fund call has now closed and the team has been busy reviewing and appraising the applications – with very welcome support from many private sector investors – with awards to be announced in the coming weeks.
“Alongside this support a further £3m was allocated to promising start-up and spin-out companies at the pre-seed stage that have the potential to attract equity finance in the future as the pipeline of these early opportunities is fundamental to our future success. A further £10m was allocated to bolster our Co-Investment Funds which will help even more globally competitive companies in the second half of the year, as we transition through the different stages of recovery. This allows the SIB team to continue our vital work in supporting the pipeline and to attract local and international investment into exciting and ambitious Scottish companies in what will continue to be a difficult time for many high growth companies.
“2020-21 will certainly be seen in an entirely different light, with significant focus on helping companies address the myriad of challenges they currently face. There are certainly companies that will sustain and support our economic recovery in the coming months and years – and we plan to be there to support as it’s clear that the role of Scottish Enterprise continues to be pivotal in supporting Scotland’s risk capital market.”
For more information on all SIB services and funds see www.scottish-enterprise.com/sib