Par Equity invested over £25m into Scottish tech sector in 2021

Par Equity invested over £25m into Scottish tech sector in 2021

Andrew Noble

Edinburgh-based venture capital firm Par Equity has more than doubled its annual investment into innovative technology businesses, from £12 million in 2020 to £25m last year.

This was in addition to a $400m exit on the sale of portfolio company Current Health in October, which continued Par Equity’s track record of successful exits, returning cash to investors every year since 2013.

Par Equity backs emerging technology stars across Scotland, Northern Ireland and the north of England. Over the course of an active year the Par Equity team reviewed close to 1,000 business opportunities, from which it selected six new investments while also providing follow-on finance for 21 existing portfolio companies.

In total, the portfolio raised £89m, with £25m coming from Par and the remaining £64m invested by a growing list of co-investment partners across the UK and in the US. In October 2021, the venture capital firm smashed through £100m of capital invested since it started in 2008. This was a major milestone for Par Equity that reflects how its business model has matured.

Andrew Noble, partner at Par Equity, said: “Over the last three years, we’ve built strong foundations for growth. We invested heavily in our team and operations, increasing our transaction and portfolio management capabilities. With an excellent track record, we can raise even more capital and continue to deploy it in high quality, scale-up opportunities.”

Having the ability to lead Series A rounds was a key development in Par Equity’s approach in 2021. In late March, it coordinated a £5m round into Cyan Forensics, an Edinburgh-based company that helps law enforcement, social media and file-sharing companies to find and block harmful content, such as child pornography. Around the same time, Par Equity also led a Series A investment into Plotbox, a Northern Irish business that provides unique software for the management of crematoria and graveyards. In October, Par Equity invested a substantial sum into Artus Air, a company recently spun out of Arup Group that has developed new, energy-efficient, air conditioning technology for buildings.

In what was reported as one of the biggest technology deals for Scotland, Par Equity exited its investment in Current Health in October when the company was acquired by US-listed Best Buy Inc. for $400m. Despite Current Health raising more than £50m of capital since 2016, Par Equity remained the second-largest investor on exit, delivering a very attractive return profile for Par’s clients.

The firm also led a “substantial” seed round into a Manchester-based business just before Christmas, with a renowned US-based investor participating alongside them. The details of this investment are yet to be disclosed.

Paul Munn, managing partner at Par Equity, added: “We had a stellar year in 2021, which saw our business model mature, and our growth rate accelerate. Our track record in terms of consistency and investor returns came together to give us the ability to support and lead the larger deals needed as our portfolio matures. We believe we can play an increasingly important role for companies seeking Series A funding, an area that is lacking across the North of the UK.

“2021 also saw us diversify our business model and take a big step forward in our ESG focus. We launched an institutional forestry fund with Aviva Investors and acquired a 6,300-hectare site at Glen Dye Moor in West Aberdeenshire. The site has the potential to capture up to 1.4m tonnes of carbon dioxide over its lifetime. We also joined the Steering Committee of ESG_VC, a pan-European initiative to help early-stage companies measure, monitor and improve their ESG credentials.”

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