Edinburgh venture capital firm Par Equity has launched a £100m fund to help high-growth Scottish tech companies to scale up.
Par Equity has secured a first close of £67m with investment from bodies including the Scottish National Investment Bank and Strathclyde Pension Fund – and says the new Par Equity Ventures I LP will be a “significant boost to the prospects of scale-up companies in Scotland”.
The fund will be managed from Par Equity’s Edinburgh base and will lead or support Series A funding rounds. It aims to partner with early-stage companies “operating B2B business models and with strong IP” in areas including health tech, climate tech and industrial tech.
The fund’s backers say the fund will help exciting young businesses to grow in what is a challenging climate for tech firms. Mark Logan’s 2020 Scottish Technology Ecosystem Review said access to funding was a barrier preventing the sector from reaching its full potential.
The fund has secured £67m cornerstone funding from the Scottish National Investment Bank, Strathclyde Pension Fund, British Business Investments, the University of Strathclyde, several family offices and members of Par Equity’s angel community. Par Equity will continues fundraising to close out the £100m fund.
Par Equity was launched in 2008 by Paul Munn, Robert Higginson, Paul Atkinson and Andrew Castell. It has invested over £160m into 77 early-stage technology companies, with 30 realisations, including Edinburgh-based Current Health – whose sale to Best Buy marked Europe’s second-largest digital health exit ever. That deal was named Deal of the Year at Insider.co.uk’s 2022 Deals & Dealmakers Awards.
Paul Munn, managing partner at Par Equity said: “We are delighted to announce the fund to accelerate innovation in Scotland and the North of the UK. Championing Scottish talent has been our aim since we launched Par Equity, and we firmly believe in the potential to nurture successful leaders right here in Scotland.
Andrew Noble, partner at Par Equity, who led the fund’s launch, added: “We are surrounded by incredible innovation, and we must now turn these fledgling start-ups into global category leaders. We look forward to working with these companies to unlock those ambitions.”
Jimmy Williamson, executive director at Scottish National Investment Bank said: “The Bank’s cornerstone investment will enable significant access to crucial scale-up funding to drive growth in the Scottish tech sector, delivering real impact by catalysing innovation and supporting the critical development of the locally-based venture capital industry.
“Working with Par and its new fund is complementary and additive to the Bank’s own direct investing activities and directly aligns with our mission to harness innovation, investing in the industries of the future.”
Neil Gray, Scottish Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, said: “Increasing the investment available to Scottish businesses represents an important step towards achieving our vision of becoming one of Europe’s leading start-up economies. I welcome this announcement and recognise the benefits it will have both to innovative companies and our wider ecosystem.”
Mark Logan, entrepreneurial advisor to the Scottish Government, added: “Scotland’s tech sector produces an ever-larger number of high-quality tech start-ups, but the ecosystem has been previously constrained by a lack of focus on the region from VCs able to provide scaling capital.
“A key recommendation of the Scottish Technology Ecosystem Review was therefore to provide a major stimulus in this area through public-private partnership. That stimulus has just arrived, and it’s a breakthrough moment for Scotland. Par Equity has again demonstrated its commitment to supporting the nation’s start-up ecosystem through its leadership in securing this scale-up fund.”