Private sector investors have committed £20m to the Scottish Co-Investment Fund launched by Scottish Enterprise, which will match the amount raised with public sector funds. The fund was conceived to fill the equity gap faced by growing SMEs in Scotland and encourage private sector investment in new areas of the market. The fund is the latest in a line of public-private-partnerships backed both by the UK government and the EC.
Investments from the fund will range from £100,000 to £500,000 to provide second round funding to early stage technology companies throughout Scotland. There will be no specific sector focus to the fund but industries likely to attract money include energy and biotechnology. The fund will participate in funding rounds of up to £1m.
Capital has been provided by Scotland’s development agency and 14 private sector partners including investment syndicate Braveheart Ventures and Archangel, an Edinburgh-based business angel network. Robert Crawford, chief executive of Scottish Enterprise, said: “Our investment has been used to lever a further £20m in gap funding which will plough £40m over the next three years directly into new and growing businesses who may have previously struggled to secure funds in an increasingly competitive VC market.” Investment decisions will be made on a commercial basis.
The fund has made ten investments so far including Arrayjet, a biotechnology robotics company, Stem Cell Sciences, which is developing regenerative therapies, CXR-Biosciences, a pre-clinical research company, Packet Dynamics, which designs Internet Access Management appliances and Tayside Flow Technologies, a medical technology company focusing on cardiovascular devices.