Tapping into Scottish talent

By Claudia Cavalluzzo, Converge Executive Director

First published in Startups Magazine on 18 March 2024

Scotland has a hidden secret… and it’s about time we started sharing it. Our nation is already well-known for its concentration of world-class universities – higher per head of population than any other country – but what we don’t shout about enough is the stream of innovative students, graduates, and staff at those universities who are turning their ideas into global businesses. 

Having such a high concentration of successful universities has led to startup and spinout companies being created to commercialise groundbreaking innovation, from science and technology through to sports and the creative industries. Clusters of companies have grown up around our universities and have become important components of Scotland’s economy.

Pioneering investors are already sitting up and taking notice of Scotland’s potential. In October, the British Business Bank (BBB) unveiled its £150 million Investment Fund for Scotland, with Maven Capital Partners managing its equity deals of up to £5 million.

Maven announced its first investment from the new fund in January, pumping £750,000 into Carcinotech, on top of an extra £4.2 million from other investors, to support its expansion into the United States. Carcinotech, a MedTech company which turns patient-derived biopsies and cells into living tumours for drug screening, was founded by Ishani Malhotra while she was at the University of Edinburgh. 

By getting in on the ground level and making investments in early-stage companies, investors can benefit as companies scale up and attract global attention. Christopher McCann left medical school at the University of Dundee in 2014 to launch remote health monitoring firm Snap40 with Stewart Whiting – their company became Current Health and was bought by American retail giant Best Buy in 2021 for £300 million.

Investing in Scottish spinouts and startups is about more than simple financial returns. One of the most exciting parts of my job at Converge – which helps students, graduates, and staff at all of Scotland’s universities to start their own businesses – is working with founders who value the impact of their innovation.

They are creating pioneering solutions that address some of the most serious challenges facing the world, from energy poverty and food security through to fast fashion and women’s health. Their innovations will deliver social and environmental impact for their investors, alongside financial returns.

That focus on the impact of investment is a thread that runs through so much of Scotland’s entrepreneurial ecosystem. SIS Ventures – Scotland’s first impact investor – and the Scottish National Investment Bank (SNIB) – the Scottish Government’s development bank – measure the impact of their investments alongside their financial returns. 

Several high growth, high tech businesses are now backed by impact investors, including Carcinotech, DXCover, Microplate DX and Elasmogen with funding rounds which are reaching millions of pounds. 

So great things do happen outside the Golden Triangle. 

Leeds, Manchester, and Sheffield universities are already demonstrating the attraction for investors of geographical diversification. Their Northern Gritstone investment vehicle raised £312m last year from a broad range of institutional investors, on top of money from local authority pension funds. Just a wee bit further north, Scotland is a land brimming with investment opportunities.

Looking at a wider range of investment opportunities is always better than only looking at what’s going on around you. No-one will ever have everything they need right on their doorstep, and that’s why it’s always good to expand the network beyond the local investor groups and broaden one’s horizons.

Innovation knows no borders – that’s why it’s time for investors to ignore lines on maps and instead look for high concentrations of world-class universities and the students, graduates, and staff who are bursting with ideas. That search will lead investors to Scotland, and that’s why, as a nation, we need to come out of our shells and shout about our well-kept innovation secret.