The appeal of Scotland's entrepreneurs was strong enough to fight off the impact of Covid-19 according to the team at leading law firm Harper Macleod, which closed deals worth more than £50 million during the first year of lockdown.
In the financial year from April 2020 to March 2021, the firm's corporate team closed 61 investment deals in total, a 42% increase in deal numbers on the previous year.
Almost 80% of those deals were in the entrepreneurial and high-growth area of corporate Scotland, and that area enjoyed an even more pronounced spike in activity, more than doubling from the previous financial year from 22 deals up to 49 deals. More than half of the overall tally, around £28 million, has come in 2021 alone, while deals are increasingly seeing investors from outwith Scotland, particularly larger transactions.
Paula Skinner, Partner and head of the Entrepreneurial and Investment team at Harper Macleod, said: "Despite everything that has happened, the faith of investors in growing Scottish businesses has stayed strong and I think this bodes well for the future. It's only by having a thriving generation of high-growth businesses that we can create the next big success story and it's a real barometer of the health of our economy that support at this level has held up. The fact that many of these investors are international also says a lot about the way in which Scotland is viewed as a hotbed of innovation."
Tech sectors, particularly technology that has a positive impact on society, were by far the most active, representing almost two-thirds of the investments closed in 2020/21. Joining them in the top three were Food, Leisure & Hospitality – despite the impact of the pandemic – and Healthcare & Life Sciences.
Harper Macleod's figures come despite some reports suggesting that investment in fast-growth Scottish businesses was down in the first quarter of 2021. However, while venture capital (VC) funding may be down, the team at Harper Macleod is increasingly seeing investment coming from high net worth (HNW) individuals. There was also a
That was never more evident than when Harper Macleod recently advised Scottish Edge on the £1m impact investment it received from some of Scotland's most successful entrepreneurs, including Sir Tom Hunter, Kevin Dorren, Sir Brian Souter, James Watt, Lord and Lady Haughey, Chris van der Kuyl and Paddy Burns.
Other significant deals during the year included investment into the new Bonnie & Wild Scottish marketplace at the St James Quarter in Edinburgh, acting on behalf of Par Fund Management on their investment into a subsea engineering business, the investment into Willo Technologies Limited by 1818 a Londonibased VC and acting on behalf of Caribou Property Limited, an international investment fund, on various investments into impact companies the UK.
Evelyn McDonald, CEO of Scottish EDGE, praised the work of the team at Harper Macleod. She said: “We were delighted to work with Harper Macleod on a deal which will help us to support additional winners in the next four rounds of Scottish EDGE and improve our chances of having a positive impact on the Scottish economy. As always, the team were a great source of advice in pulling together the paperwork.”