An expansion of activity by investment company BGF is helping it support more Scottish innovators and emerging technology businesses, according to its representative in the north.
BGF, which formerly focused only on established businesses, is now also investing in earlier stage companies, with smaller revenues and high growth potential.
The company typically invests between £1million and £15m in businesses turning over between £2.5m-£100m.
And investor Keith Barclay highlighted its £4.5m backing of Forres-based rocket maker Orbex as an example of what it is achieving through its new approach.
BGF and Octopus Ventures joined existing investors in a £17m-plus funding round in December to support the roadmap to a first launch of the firm’s Prime rocket from the planned Space Hub Sutherland spaceport in the Highlands.
Mr Barclay, who is based in BGF’s Aberdeen office and covers the Highlands and Moray, said: “The thing about that investment that was really exciting was it demonstrated what we can do now.
“We started out as a growth capital investor, with clear parameters about what where we could invest.
“The reality is that, as soon as you start setting parameters you cut out a huge segment of the market and that is not the right thing to do, particularly in Scotland.
We don’t have that many £100m turnover businesses – but we’ve got a heck of a lot of good innovators that have got fantastic technology businesses that struggle to get the support they would if, say, they were based in the US. So we have now moved into that area.”
He continued: “Orbex is a great example of what we can do now, because it is a pre-revenue business, but with incredibly exciting technology and obviously high growth potential and that is a whole new area of the market that we are now able to invest in.”
Orbex has more than doubled its workforce since the investment by BGF and others last year, as well as submitting an outline planning application for a new 107,600 sq ft factory in Forres.
Mr Barclay described Scotland’s emerging space industry as a “hugely exciting” one, with which the rest of Europe is trying to catch up.
“It would be great to have such an advanced industry as that headquartered and based out of Scotland – and, with the weight of political support behind it, that is the plan,” he added.
‘Great spin-outs’ from universities
Also highlighting the potential of Scotland’s life sciences sector, he continued: “Scotland is just full of amazing innovators and there are some great spin-outs coming from the universities.
“We want to make sure that companies realise there is an option out there that allows them to take control of their businesses, but also allows them to deliver plans they thought might not be achievable.
We want to support the entrepreneurs to be in charge of their own businesses and keep growing them, rather than feel they have to sell them.”
Last year, BGF, formerly known as The Business Growth Fund, invested £37 million in more than a dozen growth businesses across Scotland and Northern Ireland during 2020.
This was nearly twice as much as the £20m total for the previous year, despite the Covid-19 pandemic.
In 2019 BGF invested £5m in care home provider Parklands Care Group, marking its first activity in the Highland and Moray areas.