Venture Capital (VC) investment into Scotland’s start-up and scaling businesses increased slightly in the opening quarter of 2025, according to the latest KPMG Private Enterprise Venture Pulse report.
Twenty-seven investments were concluded in the region, highlighting sustained appetite among VC investors looking to support Scotland’s burgeoning start-up community.
Having raised £92.3million in the final quarter of 2024, business in the region received £100.5million from VC investors in the first three months of this year – an 8% increase – and marks a slight increase on figures from Q1 2024, when £98million was raised.
The largest raise was for Blk Global, a Glasgow-based online commodity and industrial supplies marketplace, which raised £50million, and drove the business-to-business products and services sector’s dominance in deal values across Scotland.
Other key deals included a £13.4million investment in IONATE, which is developing grid-scale power technology to support the net zero transition, and £8.8million in OCEANIUM, a producer of innovative seaweed-based ingredients for food and health.
With two fifths (41%) of investments made in Edinburgh-based firms, and 30% in Glasgow, firms in places such as Falkirk, Oban and Stonehaven contributed to the remaining deal value (£19.7million).
Vishal Chopra, senior partner for KPMG in Scotland, said: “It’s encouraging to see the latest investment figures reaffirm what we already know about Scotland’s start-up ecosystem: it’s diverse, resilient and brimming with high-growth potential. Crucially, investor appetite remains strong, providing the capital and confidence these businesses need to scale.
“While B2B services continue to lead the charge, it’s also promising to see consumer and healthcare sectors gaining ground, particularly in emerging growth clusters beyond Scotland’s major urban centres.
“With a solid foundation of data behind us, now is the time to double down, supporting innovation where it’s happening and nurturing these bright spots. This is where the strength of the broader ecosystem, including advisors, mentors and fellow founders, really comes into play.”
National outlook
The UK remains number one in Europe for VC investors despite a fall in both overall investment and number of deals, according to new figures.
The report showed that the UK continues to come out on top across the EU with a total of £4.1billion raised across 507 deals during the first quarter of 2025, securing four out of the top 10 deals including the biggest in Europe after London-based AI drug discovery Isomorphic Labs scooped a £453million award.
This was also partly driven by strong investment in the health and biotech sector during Q1 2025, including UK-based Verdiva Bio securing £309million and Cera £113million.
However, overall, the quarter recorded a fall when compared to Q4 2024 in both the overall level of investment (from £4.4billion to £4.1billion) and total volume of UK VC deals (from 569 to 507) - driven by investor confidence currently being aligned with more established, proven start-ups given uncertain market conditions and ongoing lack of exits.
Nicole Lowe, UK head of KPMG’s emerging giants practice, said: “In a financial climate that is currently fluctuating on a daily basis following the recent activation of tariffs across the globe, investors are backing companies that offer the fastest path to profitability.
“This has made it challenging for UK startups in IP rich areas as these are longer term investment areas, which, while not favourable at this moment, could actually provide excellent opportunities in the coming weeks, months and years.
“This switch could indicate we are at risk of missing out on important investment in these sectors, which are key to driving long-term economic growth and supporting our future workforce, and therefore should ensure we all be doing as much as we can to make these investments as attractive as possible.”