Angel investment in Scotland almost doubled in 2021

Angel investment in Scotland almost doubled in 2021

David Grahame, executive director

In 2021, deals led by angel syndicate members of LINC Scotland secured in total £146 million funding for young companies with high growth potential, almost double the amount raised in 2020, and 70% higher than the record set in 2019.

Before the pandemic struck, 2019 had been a high point in the angel investment market in Scotland, with a record number of deals and a record £86m invested. The market slowed in 2020 as investors made a priority of supporting investee companies, but has now rebounded.

Several of the LINC member syndicates reported their busiest year to date:



  • Archangels made 11 investments, totalling £23.7m, an increase of 44% over 2020.
  • Par Equity more than doubled its investment, deploying £25m, up from £12m in the previous year, with six new investments and follow-on finance for 21 companies. This took the firm past the £100m benchmark of capital invested since it started in 2008.
  • Equity Gap has reached a £25m investment milestone following its most successful year to date, leveraging additional funding of over £100m for investee companies since its launch. These investments have helped create over 500 high quality jobs in Scotland, worth around £20m each year to the Scottish economy.

The LINC Scotland membership includes 21 syndicates, which together invested 50% more in 2021 than in 2019, with contributions averaging £470k, 80% higher than in 2019.

The syndicates were very successful in bringing external co-investors into their deals – corporate investors, venture capital firms, other angel groups, and other institutional investors, many from outside the UK. These co-investors contributed 54% of the total amounts raised in 2021, with an average investment of £1.7m, almost double the 2019 level. Support from public sector investors, chiefly Scottish Enterprise, stayed constant throughout this period, at approximately 20% of the total.

In a strong year for recycling of capital across the sector, LINC syndicates benefited from two exceptional exits.

Par Equity exited its investment in Current Health in October when the company was acquired by US-listed Best Buy Inc. for $400m. Par led the company’s first external investment round in 2016, and ultimately achieved an 80% internal rate of return (IRR) for the syndicate.

Similarly, the trade sale in December of Spoonfed to 365 Retail Markets, backed by Providence Equity Partners, delivered returns for 31 of Equity Gap’s members, including seven of the original founder members.

As the British Business Bank explains in its UK Business Angel Market 2020 report: “Exits are a key process in entrepreneurial ecosystems as they drive investor returns and provide liquidity to limited partners (and angel investors), freeing up capital for future investments… Exits also create wealth for company founders, enabling them to found new ventures, invest in other firms or share their expertise and, as such, can create future angels to help the next generation of entrepreneurs in the region.

“This process is often called entrepreneurial recycling…Without an angel investor many will not make it to the next step so for entrepreneurial recycling to happen, angel investors can be the seed from which a local or regional equity ecosystem can grow.”

This process is increasingly well established in Scotland, and on top of the strong increase in investment, a flow of exits (especially large deals such as Current Health and Spoonfed) underlies a strongly positive outlook for Scotland’s angel syndicates in the year ahead.

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