115 Scottish firms share £359 million worth of Venture Capital investment across 2023

A new global report by professional services firm KPMG has revealed that 115 Scottish firms received over £359 million worth of Venture Capital (VC).

A new global report by professional services firm KPMG has revealed that 115 Scottish firm

A new global report by professional services firm KPMG has revealed that 115 Scottish firms received over £359 million worth of Venture Capital (VC) investment after being identified as the most promising throughout 2023.

The Venture Pulse Survey showed that there was a marked decline in global VC r activity during 2023  when compared to record investment levels seen in 2022 and 2021, which were £707m and £628m for Scottish scale up respectively.

During the last quarter of 2023, a total of 45 deals were recorded for Scottish innovators, with a value of just over £71 million. Deals during this period were mainly centered around firms in three areas – Glasgow, Edinburgh and Dundee.

Standout deals across the entire 12 month period included:

  • Alternative meat start-up ENOUGH which raised £31m in equity to help bring more plant-based chicken, mince and dairy products to supermarkets and fast-food chains
  • Manus Neurodynamica, which develops and markets products and technologies for neuromotor assessment. The company closed a £2.6 million funding round to support the commercialisation of its NeuroMotor Pen – a medical device to aid diagnosis and monitoring of neuromotor disorders including Parkinson's disease
  • Fintech firm DirectID, which provides data to optimise credit and risk decisions. It attracted a £7.69 million minority investment from IKEA’s investment arm, Ingka Investments

Graeme Williams, Head of Corporate Finance M&A for Scotland at KPMG UK, said: “It is fair to say that figures for 2023 have revealed a slowdown, especially when compare to the record breaking results of the previous two years.

“After two years of exceptional activity, the market has reached a more stable point and what we are seeing not just in Scotland but globally is caution for investors who are little more wary of the types of deals they commit to being part of.

“Looking ahead, it's likely that venture capital investment will remain stable at the very least in the face of challenges such as geopolitical complexities.

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“However, from the deals that we have seen take place, there is evidently still strong interest in Scottish firms and investing in them.”

Amy Burnett, KPMG Private Enterprise Senior Manager in Scotland, said: We continue to see investors focus on new emerging technologies such as Cleantech, AI and wider Life Sciences including Medtech – all strong areas in Scotland where we are seeing IP rich businesses spun out of universities.

“I am hopeful that this knowledge and expertise sets Scotland in good stead for 2024, and beyond, when it comes to our talented businesses raising venture capital.

“There is no doubt that there has been a re-levelling in the markets, but I am hopeful that the renewed focus of investors on sustainable and profitable business models will be welcomed by our Scottish founders, who have historically taken a canny approach growing their businesses, and to fundraising.”

Meanwhile, London attracted the lion’s share of UK VC investment in 2023, at £10.7 billion across 1,495 deals, however, this was significantly down on the £22.3 billion raised by London businesses across 2086 deals in 2022. London-based businesses accounted for five of the 10 largest European fundraises in the final quarter of 2023, including the £788 million raised by communications firm DAZN, whilst the £141.6 million raise by Manchester-based Castore also made it to the top 10 largest deals in Europe. 

Commenting on the findings, Nicole Lowe, UK Head of KPMG UK’s Emerging Giants practice, said:

“Fast growth businesses in the UK have been fairly resilient to the global downturn in VC investment, with fundraising levels continuing on a positive trajectory, and above pre-pandemic years. Whilst there is a real craving for normalcy and a period of stability this year to help boost the environment for fundraising, it is unlikely that the conditions improve much over the next 12 months. 

“With the headwinds remaining challenging, UK businesses looking to raise funds will need to ensure they have really strong business models and management teams in order to attract VC investment. Given the global economic climate, VC is shifting from a 'growth at all costs' model to prioritising innovative companies with robust unit economics. This new focus on strong gross margins and effective customer acquisition strategies underscores a balanced approach in risk management and value creation, favouring sustainable growth and financial stability over rapid cash burn and scale.”




Venture Pulse Methodology

KPMG uses PitchBook as the provider of venture data for the Venture Pulse report.  Data is a snapshot of deals recorded as of 15th January 2024. 

PitchBook defines venture capital funds as pools of capital raised for the purpose of investing in the equity of startup companies. In addition to funds raised by traditional venture capital firms, PitchBook also includes funds raised by any institution with the primary intent stated above. Funds identifying as growth-stage vehicles are classified as PE funds and are not included in this report.

A fund’s location is determined by the country in which the fund is domiciled; if that information is not explicitly known, the HQ country of the fund’s general partner is used. Only funds based in the United States that have held their final close are included in the fundraising numbers. The entirety of a fund’s committed capital is attributed to the year of the final close of the fund. Interim close amounts are not recorded in the year of the interim close. Mega-funds are classified as those of £500 million or more in size for the following fund categories: venture and secondaries.


The Venture Pulse does not contain any transactions that are tracked as private equity growth. PitchBook defines a PE growth round as a financial investment occurring when a PE investor acquires a minority stake in a privately held corporation. Thus, if the investor is classified as PE by PitchBook, and it is the sole participant in the recipient company’s financing, then such a round will usually be classified as PE growth, and not included in the Venture Pulse datasets.


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 18,000 partners and staff. The UK firm recorded a revenue of £2.96 billion in the year ended 30 September 2023. 

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.