This was an increase of 20% on the amount invested in 2021, and up 86% on the 2019 total.

The total value (including all investors) of the deals in which the groups invested in 2022 was £117.4m, with co-investment from other private sector investors (£33.5m) and public sector agencies, mainly Scottish Enterprise and the Scottish National Investment Bank (together £33.8m).

This is the fourth year in a row that the angel groups have substantially increased their support for early stage companies in Scotland with high growth potential. Over the same period, the annual totals including co-investors and the public sector have expanded by 37%, from £85.8m in 2019.

Total deal sizes are usually influenced by a small number of high value investments by VCs or other types of investor joining the angel groups in deals, the value of which fluctuates widely from year to year. In 2021 two deals alone included investment of £47m from private sector co-investors, accounting for 32% of that year’s overall investment of £146m (60% of all co-investment).

This level of co-investment reduced in 2022, but there were 11 deals in which private sector co-investors contributed over £1m to the total, the largest of which were in Pneumagen (£5.2m), Snappy Shopper (£3.0m), and ShotScope (£2.2m). In each of these cases the angel groups concerned had supported the company at an earlier stage and helped introduce new institutional or corporate investors.

Examples of the VCs, corporates, and family offices co-investing with angel groups in 2022 are Agtech Fund, EMV Capital, Calculus Capital, Sapphire Capital Partners, Highland Tech, Guinness Ventures, FNZ Investment, Souter Investments, Techstart Ventures, and Foresight Group, as well as the Scottish National Investment Bank.

Although there were no exits last year as large as that of Current Health (acquired for $400m in 2021), several angel groups were able to provide their members with proceeds from trade sales, including those of IRT Surveys, Money Dashboard, Sharktower AI, CuanTec, and the IPO on NASDAQ of TC BioPharm.

David Grahame

David Grahame, LINC’s executive director, said: “Business angels necessarily take a long-term view rather than overreacting to current events, and it is good to see our members actually further increasing their commitment to supporting Scotland’s most exciting young companies.

“At the same time the increasing range of institutional and other co-investors is an encouraging sign of a maturing ecosystem.”

The supply of risk capital to the Scottish market remains strong. KPMG recently reported a total of £705m VC investment in Scottish companies in 2022 (but the largest deal quoted was the £40.4 million led by the Scottish National Investment Bank); Scotland’s business angels are playing a major role in this sector.