Scottish companies attracting growing international interest

The Herald Scotland

4 days ago

Hearteningly for those who like to see Scotland succeed, there is much encouraging in terms of the international perception of the nation.
Scotland has over the years performed impressively in attracting foreign direct investment (FDI), in contrast to the 'foolish notion' of some detractors who try to paint the nation as an economic basket case.
More about that FDI success later.
Last week, research published by Young Company Finance concluded that 'Scotland's early-stage investment landscape continues to broaden its international appeal'.
YCF's latest Scotland newcomer investors report showed 73 investors new to the Scottish market participating in funding rounds during 2024.
Highlighting growing international interest, YCF declared: 'The 73 newcomer investors in 2024 represent the highest number recorded since 2021, demonstrating Scotland's expanding reputation as an attractive investment destination.'
An 'expanding reputation' for Scotland is something that should be music to the ears of all, although it will likely be heard as a bum note by those who would for their own political ends rather hear a different tune.
YCF, which confirmed that more than half of the 73 newcomer investors in 2024 were from overseas, observed: 'The report, which tracks investors making their first investment in a Scottish company, shows an overall 20% increase from 61 newcomers in 2022.'
The figure for 2023 for newcomer investors was 65.
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YCF observed that median deal sizes for newcomer-backed funding rounds increased 'significantly' - by 28% to £3.86m in 2024 from £3.02m in 2023. It noted this had occurred 'even as overall median deal sizes across all Scottish rounds decreased from £1.2m to £1m'.
It declared that veterinary diagnostics company MI:RNA 'exemplified Scotland's appeal to international investors, attracting five newcomers - NovaQuest, Kyoritsu, VANE, Animal Health Angels, and Companion Fund I - in its £3.55m raise, supported by established Scottish investors Equity Gap, Gabriel, and Scottish Enterprise'.
YCF added that golf wearable technology firm Shot Scope 'also demonstrated the consumer sector's international appeal'.
Alison Grieve, of YCF, said: 'The steady rise in newcomer investors signals growing international engagement with Scotland's early-stage market. Even in challenging market conditions, we're seeing larger deals and sustained international interest in Scotland's known strengths in life sciences and renewable energy, but also in the emerging consumer technologies category, which has not traditionally been a focus for Scottish investors and public funding bodies.'
She added: 'The upward trajectory of newcomers suggests Scotland is becoming increasingly integrated into global investment networks, bringing not just capital but international expertise and expansion opportunities to Scottish scale-ups. Our data indicates that newcomers are targeting more established opportunities, potentially reflecting confidence in Scotland's maturing startup ecosystem.'
These sound like very promising trends.
YCF noted its report 'broadly categorises companies into those that are feeding, healing, or fuelling the world'.
It added: '2024 continued to see Scotland's 'healing' companies attract the most investment from newcomer investors - £68m, with 12 rounds completed - with 'feeding' and 'fuelling' jointly raising over £61.2m in newcomer-backed rounds.'
Returning to the consistently positive numbers for Scotland on overseas companies setting up or expanding operations here, accountancy firm EY's latest attractiveness survey in June revealed that the nation increased its share of FDI projects in the UK again last year as it continued 'to punch above its weight'.
And Scotland in 2024 remained second only to London in the league table of the UK's top locations for FDI, according to the survey.
Scotland secured 135 FDI projects in 2024, the EY figures show.
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Although down by 4.9% on the all-time high annual number of 142 FDI projects won, in 2023, the figure for 2024 was the second highest on record.
Scotland's share of UK FDI projects was 15.8% last year, up from 14.4% in 2023 and significantly higher than the average of 11.5% over the last decade. In 2022, Scotland's share was 13.6%.
EY's figures show Scotland has been second only to London in terms of the number of FDI projects won in every year since 2015. Scotland was also second only to London in 2010 and 2012.
And Scotland has increased its share of UK FDI projects for six consecutive years.
EY's Ally Scott declared in June: 'Put simply, Scotland continues to punch above its weight with inward investment. While project numbers slipped back slightly in 2024 from their record high the previous year, a much sharper fall in projects into the UK overall saw Scotland's share increase for the sixth year running. In doing so, Scotland consolidated its decade-long position in second place for UK FDI.'
US President Donald Trump spoke on Monday, during his visit to Scotland, about his Scottish mother who was born on the Isle of Lewis and declared: 'This is a part of the world I want to see thrive. It's going to thrive.'
While it is important to bear in mind that this remark comes from a politician visiting Scotland, it is surely noteworthy that Mr Trump appears much more positive about the nation than many people living here who seem determined to seize every opportunity to be negative about it.
Of course, it is important for Scottish Government ministers and other key players, such as economic development agency Scottish Enterprise's top brass and senior figures in business, not to become complacent following many years of great FDI success.
However, there is no sign of any such complacency and, while it is always important to recognise not everything in the garden is rosy and there is always room for improvement, the numbers are tending to tell a good story when it comes to Scotland.
They are doing so particularly in relation to Scotland's reputation on the global stage, whether that be in relation to FDI or the attractiveness of the nation's companies to overseas investors, and this hopefully bodes well for the future.