The Venture Pulse Survey shows this is a marked a decline from record levels seen in 2022 and 2021, which were £707m and £628m for Scottish scale up respectively.

In Q4 2023, 45 deals worth over £71m were recorded, mainly centred around Glasgow, Edinburgh and Dundee. Notable deals included £31m for alternative meat start-up ENOUGH, £2.6m for neuromotor assessment firm Manus Neurodynamica, and £7.69m for fintech company DirectID.

Graeme Williams, head of corporate finance M&A for Scotland at KPMG UK, said: “It is fair to say that figures for 2023 have revealed a slowdown, especially when compare to the record breaking results of the previous two years.

“After two years of exceptional activity, the market has reached a more stable point and what we are seeing not just in Scotland but globally is caution for investors who are little more wary of the types of deals they commit to being part of.

“Looking ahead, it’s likely that venture capital investment will remain stable at the very least in the face of challenges such as geopolitical complexities.

“However, from the deals that we have seen take place, there is evidently still strong interest in Scottish firms and investing in them.”

Amy Burnett, KPMG private enterprise senior manager in Scotland, said: “We continue to see investors focus on new emerging technologies such as Cleantech, AI and wider Life Sciences including Medtech – all strong areas in Scotland where we are seeing IP rich businesses spun out of universities.

“I am hopeful that this knowledge and expertise sets Scotland in good stead for 2024, and beyond, when it comes to our talented businesses raising venture capital.

“There is no doubt that there has been a re-levelling in the markets, but I am hopeful that the renewed focus of investors on sustainable and profitable business models will be welcomed by our Scottish founders, who have historically taken a canny approach growing their businesses, and to fundraising.”