Pioneering tech investment fund to be showcased at Stirling roadshow

Stirling Council is joining city-based syndicate ESM Investments to showcase a new fund, thought to be the first of its kind, that is aiming to turn the area into Scotland’s next technology hub.

The collaborative £25 million ESM Capital Growth Enterprise Investment Scheme Fund is being set up to support “innovative growth and scale-up technology orientated companies” across Stirling, Scotland and the north of England.

The initial target of £25 million is being sought from a mix of private and public-sector investors, and will include investment from the ESM Investments syndicate, led by founder and chief executive Steven Morris.

The fund will subsequently look to make investments of between £500,000 and £2 million in a series of “strongly managed dynamic technology enterprises” that may be struggling to access capital for further development.

The fund intends to make investments in EIS qualifying enterprises thereby enabling investors who are UK income tax payers to obtain 30 per cent income tax relief on the capital invested upfront and disposals free of capital gains tax, plus other benefits.

Mr Morris was recently appointed a city commissioner, a unique approach by a regional council, to develop new opportunities in the Stirling area.

He said: “It is clear that many viable, dynamic enterprises with innovative products and services, strong business plans and capable management teams, struggle to access the investment that will allow them to develop their businesses.

“Bridging the equity gap for early to growth stage technology companies is a major challenge to fostering innovation and entrepreneurship.

“The fund will seek to address just that as well as giving investors the prospect of attractive long-term returns from businesses that hopefully will flourish with their support.

“We have already had several strong notes of interest in our plans and really look forward to presenting further details to additional investors.”

Stirling Council is hoping the support for high-growth potential and digital technology businesses will contribute to job creation and sustainable innovation and act as a key building block in realising its ambitions ahead of the anticipated City Deal for the area.

Stewart Carruth, Stirling Council’s chief executive, said: “We believe the fund will help businesses, both in Stirling and outside of the region, to realise their ambitions for growth.

“It will provide encouragement to local scale-up companies to continue growing their businesses, thereby creating sustainable employment. It will also enable entrepreneurs outside of the area to consider Stirlingshire as a location to establish or scale-up their businesses to the next level, thereby creating new inward investment.

“It builds on the foundations of the City Region Deal and is a catalyst in terms of retaining and attracting talent to Stirling.

“Stirling has great potential. We have a strong pipeline of talent – digital employees of the future – through well-established collaboration between industry, Stirling Council and our partners.

“My vision is for us to become an economic and cultural powerhouse that can compete globally”.

The ten-year fund is expected to launch later this year with a five-year “investment period” in a series of businesses followed by a five-year “maturity period” where the values of the stakes, at that point, will be realised and delivered to investors.

Stirling Council will showcase the partnership with ESM, a boutique investment firm established in Stirling to provide investment and business consulting for technology and scale-up companies, at an event on Friday 23 February at the Codebase offices in the city.