The Bank’s Nations and Regions Tracker found there were 475 equity deals, worth a combined £710 million, involving technology and IP-related businesses in Edinburgh, Fife, Midlothian, and West Lothian between 2011 and the second quarter of 2023. Greater Manchester was second with 342 deals valued at £1.1 billion.

While the Greater Glasgow area was third with 257 technology and IP-related deals overall and £427 million, it ranked second only to Oxford for its share of deals involving academic spinouts. Nearly half, 47%, of equity transactions over the past 12 years have included a spinout from universities in the city and beyond, attracting £214 million of investment.

Glasgow was closely followed by Aberdeen, where 46% of technology and IP-related equity transactions over the same period involved a spinout, placing it third in the UK. Of the 24 spinout equity deals in the city, 21 were from the University of Aberdeen, including three transactions worth more than £10 million related to therapeutics company TauRx.

Although Aberdeen is best known for its oil and gas industry, life sciences was the dominant sector accounting for 81% of technology and IP-related spinouts involved in equity deals in the city. In fact, the life sciences industry was the largest sub-sector across all four of the nation’s innovation clusters – Edinburgh, Glasgow, Aberdeen, and Dundee – both in terms of deal numbers and investment value.

The Nations and Regions Tracker also found that during 2022 the combined Nations and regions outside of London recorded their first year-on-year decline in the number of equity deals since Beauhurst’s data collection began in 2011 (-10%), with the total investment value in these areas also falling (-11%). Scotland saw the steepest decline in the number of deals, falling -22% to 190, but saw a 37% increase in total investment value to £760 million.

In Q4 2022, 34% of small businesses in the UK were using some form of external finance – a decline of -7 percentage points from Q4 2021 and -10 percentage points from the same period in 2020. Throughout 2022, 36% of UK smaller businesses sought external financial support, but this recovered to 43% during the first half of 2023.

Earlier in October, the British Business Bank launched its £150 million Investment Fund for Scotland. The fund will drive sustainable economic growth by supporting new and growing businesses across the whole of Scotland through investment strategies that best meet the needs of these firms. It includes a range of finance options, with loans from £25,000 to £2 million and equity investments up to £5 million, to help small and medium-sized businesses start up, scale up, or stay ahead.

Susan Nightingale, director, UK Network, devolved nations at the British Business Bank, said: “We are seeing promising signs that the use of external finance among smaller businesses is recovering after a decline in 2022. Unsurprisingly, our world-class universities continue to play a crucial role in this, supporting emerging innovation-led clusters across the UK.

“Improved access to external finance will enable smaller businesses to expand and we need to ensure that more is done to support them, regardless of where they are located. This is one of the key drivers behind our recently launched Investment Fund for Scotland, which we have begun to roll out across Scotland.”