Edinburgh and Glasgow universities boost Scots startup rate

The Herald Scotland

24-06-2025

The increase in the backing provided for Scottish businesses by shareholders was achieved during a year in which the total equity funding secured by firms across the UK fell by 2.5%, to £10.8 billion.
The relatively strong performance by Scotland will boost hopes that the country is achieving success with longstanding efforts to support the creation of more firms that have the potential to achieve rapid growth. This is seen as key to boosting the growth rate of the Scottish economy.
The British Business Bank report highlighted Scotland's success in sectors that it is reckoned are set for strong growth, such as life sciences and biotechnology.
It said academic institutions in Scotland made a significant contribution to the increased level of activity by encouraging the development of spinouts that attracted the attention of investors.
The University of Edinburgh secured the second highest number of deals with 18 putting it on a par with the University of Oxford. The University of Cambridge topped the table with 34.
The bank noted: 'Meanwhile the University of Glasgow also recorded ten deals in 2024, cementing Scotland's position as a leading area for breakthrough companies outside of the Golden Triangle [spanning Oxford, Cambridge, and London].'
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Scotland director Susan Nightingale said Scottish firms had performed well against the backdrop of challenging conditions last year.
Concerns about the outlook for the economy and the impact of relatively high interest rates amid the Bank of England's efforts to tackle inflationary pressures weighed on activity.
'Smaller businesses play a crucial role in Scotland's economy, and it is great to see that firms, particularly spinouts, are continuing to attract external finance to help them achieve their goals,' said Ms Nightingale.
'There is a strong track record of early-stage companies emerging from some of the nation's major research hubs, and that also shows no signs of slowing down.'
Ms Nightingale noted that angel investors have played an important role in supporting an increase in the number of funding deals in Scotland.
The country is renowned for the strength of its angel investor community. A range of schemes have been developed by Scottish Governments in recent decades to support angels by investing alongside them in firms with strong growth potential.
The British Business Bank was launched by the UK Government in 2014 amid complaints that smaller businesses found it hard to access funding.
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The bank launched a £150m investment fund for Scotland in 2023, which it operates with partners. More than £12m of the fund was allocated last year.
The bank said it had been working with Mint Ventures in Scotland since 2023 to support and accelerate the development of female-led angel syndicates and boost the flow of capital to female-founded firms.
It said around 30 angel investors had been 'onboarded' and these had completed deals worth more than £5m in total.
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However, the bank cautioned that the UK still lagged the US in key respects.
Chief investment officer Leandros Kalisperas said: 'Our research finds that the UK still requires more investment to close the gap with the US market. This is particularly the case in R&D intensive industries and in modern Industrial Strategy growth-driving sectors, such as life sciences and advanced manufacturing.'
The report covered businesses with less than 250 employees and either a turnover of less than €50m (£42.5m) or balance sheet total of less than €43m.