Scotland emerging as venture capital hotspot

Venture capital owned businesses now account for 9,000 employees in Scotland, indicating its rise as a VC hotspot outside London.

The British Private Equity & Venture Capital Association’s report Venture Capital in the UK found that 7% of the UK’s VC-funded firms are in Scotland.

Edinburgh continues to lead the Scottish VC landscape, attracting the bulk of the investment, because of a high number of fintech and health tech startups.

Scotland has also been able to leverage the prowess of its world class academic institutions to successfully generate equity deals from university spinouts, with both the University of Edinburgh and the University of Strathclyde in the top 10 of academic institutions by number of equity deals secured by their spinouts in 2023.  

Scotland’s increasing share of venture capital investment is part of a wider trend of growth outside of London.

As investors seek diversification and regional opportunities, Scotland’s blend of high-potential startups, world-class universities, and supportive government initiatives continue to make it a key player in the UK’s venture capital landscape.

Michael Moore, chief executive of the BVCA, said: “Venture capital in Scotland is a success story that is worth recognising.

“By leveraging its world class universities and inherent spirit of entrepreneurial innovation, Scotland has managed to nurture and grow a successful domestic startup scene backed by supportive venture capital funds.

“To keep this momentum going, it’s important that the very promising reforms to the UK DC [defined contribution] pensions system outlined by the Chancellor in her Mansion House speech, help to drive investment and increase the opportunity for pension savers to benefit from investing in our vibrant regional venture capital sectors.”