Edinburgh angel investor pumps £3.6m into Scottish business

Business angel syndicate Equity Gap has invested £3.6 million in early-stage businesses in 2019, praising the “strength and quality” of start-ups and entrepreneurs in Scotland.

Thursday, 6th February 2020, 11:45 am
Jock Millican (left) and Fraser Lusty, directors of Equity Gap. Picture: Ditte Solgaard

The Edinburgh-based group delivered 23 funding rounds last year and added five new companies to its portfolio.

Factoring in the involvement of partners and other stakeholders, this leveraged a total investment into the portfolio of £21.5m for the year.

This follows a record performance in 2018 which saw the syndicate directly invest £5m. Equity Gap has leveraged a total of £71m into its portfolio companies since it was founded in 2010.

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New seed investments last year included compliance software firm Amiqus Resolution, smart security solution Boundary and aviation medical emergency technology provider Mime Technologies.

Four follow-on rounds were transacted at more than £1m including those for fintech lending specialist LendingCrowd, and remote sensoring technology company Synaptec.

Equity Gap, which recently expanded to new premises in the centre of Edinburgh, said its co-investment partnerships with other angel syndicates and support from the Scottish Investment Bank evidence “the availability of capital for scale-up opportunities across a wide range of sectors in Scotland”.

Rise in overseas investors

Jock Millican, director of Equity Gap and chairman of the Linc Scotland angel capital association, said: “Most of these companies simply would not get funding without the support of the business angel community. The funds raised have given our portfolio companies the ability to grow, create quality employment opportunities, especially for graduates, and build prosperity across the wider Scottish economy.

“Even those companies that complete a successful exit tend to maintain their operations here.”

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The syndicate hailed the addition of investment from overseas, adding that it will continue working with Linc Scotland, UK Business Angels Association and Women’s Enterprise Scotland to encourage wider participation in angel investment.

Fraser Lusty, Equity Gap director, added: “This year, on the back of our UK Business Angels Association most active regional investor award, we have been fortunate to see good organic investor growth from a variety of new geographies, including Germany, US and Australia.

“Equally, it is key for the syndicate to help our portfolio companies grow smoothly and look to bring forward the right exit deals and this in turn, has invigorated our desire to build stronger cross-border relationships with venture capital and M&A [mergers and acquisitions] specialists.”

In December, Archangels, the Edinburgh-based syndicate believed to be the oldest of its kind in the world, likewise pointed to another “active year of support” for Scottish companies despite a backdrop of political and economic uncertainty.

The network directly invested £8.2m in 2019, which is down on £10.9m in 2018, and was lead investor on ten funding rounds with total investment, including co-investors’ contributions, of £14.8m, which is some way shy of last year’s £22.4m.