Scottish businesses have once again proven their appeal to investors, as 23 companies across the country secured a combined £85.3 million in funding during the second quarter of 2024, according to the latest KPMG Private Enterprise Venture Pulse report.

The report highlights the continued resilience of Scotland’s entrepreneurial landscape, with firms from Edinburgh, Stirling, Dundee, and Glasgow attracting significant venture capital (VC) investment.

This brings the total venture capital raised by Scottish companies in the first half of 2024 to £184 million, shared by 42 firms across a range of industries. Notable deals from the second quarter include £13 million for Edinburgh-based Prothea Technologies, £11.1 million for Stirling’s iGii, and £10 million for Dundee’s Outrun TX, showcasing the diversity and innovation driving the country’s business environment.

Optimism Despite Market Volatility

Amy Burnett, Senior Manager at KPMG Private Enterprise in Scotland, expressed optimism about the steady stream of investments, despite the broader economic uncertainties. “We’re seeing continued investment in firms across Scotland, and I hope that we continue to see investment of a similar or larger size for the remainder of 2024,” Burnett said.

While acknowledging the absence of a significant surge in VC funding, she remains hopeful for a calmer second half of the year, particularly following the appointment of a new UK government.

Burnett praised the ongoing support for businesses developing solutions to real-world problems, particularly in the technology sector. “I’m pleased to see continued investment in exciting technologies in Scotland,” she added, pointing to the growing role of Scottish firms in addressing global challenges through innovation.

Strength in Stability

Graeme Williams, Head of Corporate Finance M&A for Scotland at KPMG UK, echoed Burnett’s optimism, noting that Scotland's performance in the second quarter remains strong. "Scotland’s figures continue to be robust in the second quarter, and with more stable market conditions, we hope investment levels will continue to grow during the final two quarters of the year," Williams stated.

Scotland’s ability to attract significant investment comes as the UK VC landscape as a whole begins to show signs of recovery after a slow start to 2024. Nationally, Q1 2024 saw just £3 billion raised, marking the lowest amount in 22 quarters.

However, Q2 2024 delivered a sharp turnaround, with UK businesses raising £6.9 billion in venture capital—more than double the amount secured in the previous quarter. This figure also represents a year-on-year increase compared to the £4.7 billion raised in Q2 2023, suggesting a shift in investor sentiment as market conditions begin to stabilize.

A Promising Outlook for 2024

As Scotland continues to capture the attention of investors, the country’s firms are well-positioned to benefit from the improving VC environment. The influx of funding is expected to fuel growth and innovation across key sectors, with particular attention on technology-driven solutions to global challenges.

With £184 million raised in the first half of the year, Scotland’s businesses are on track for a strong 2024, bolstered by the prospect of continued investment in the months ahead.

For now, the outlook for Scotland’s businesses remains bright, with both investors and entrepreneurs hopeful for a more stable and prosperous second half of the year.