Lloyd Price
- Sep 16, 2023

HealthTech Scotland Primed for Success: 80% of Scotland's Top Ten Start-ups are HealthTech related

Exec Summary:

The Scottish HealthTech sector saw continued growth in 2023, with investment reaching record levels despite a challenging global economic climate. Here are some key takeaways:

Overall Investment:

Total investment: While the exact figure is yet to be finalised, it's expected to surpass the 2022 record of £705 million.
Growth: This represents a year-on-year increase of over 12%.
Stage distribution:
Early-stage: Seed and Series A rounds accounted for the majority (52%).
Later-stage: Series B and C rounds saw a significant increase (37%).

Investment by Sector:

Top three:
Digital health (£244 million)
Therapeutics (£225 million)
Medtech (£136 million)

Contributing Factors in 2023:

Strong ecosystem: Scotland boasts a supportive ecosystem with government initiatives, industry bodies, and a strong academic research base.
Growing demand: The global healthtech market is experiencing significant growth, driven by factors like aging populations and increasing healthcare costs.
Innovation: Scottish companies are developing innovative solutions to address healthcare challenges, attracting investor interest.

Looking Ahead into 2024:

The outlook for 2024 remains positive, with continued investment expected in the Scottish HealthTech sector.
Companies like Elasmogen and Rationale are primed for further growth in 2024.

Corporate Development for Healthcare Technology companies in EMEA

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Scotland's top ten tech start-ups - HealthTech related companies

Investment into the Scottish healthtech market in 2022 reached a record high of £705 million, surpassing the previous record of £626 million set in 2021. This represents a year-on-year increase of 12%.

The majority of investment was into early-stage companies, with seed and Series A funding rounds accounting for 52% of the total. However, there was also a significant increase in investment into later-stage companies, with Series B and C rounds accounting for 37% of the total.

The top three sectors for investment were:

Digital health (£244 million)
Therapeutics (£225 million)
Medtech (£136 million)

Some of the notable deals in 2022 included:

Amphista Therapeutics (£38 million)
Resolution Therapeutics (£34 million)
ODx (£7.6 million)
Changingday (£5 million)
Well-Safe Solutions (£50 million)
TauRx Pharmaceuticals (£78 million)

The record investment into the Scottish healthtech market in 2022 is a testament to the strength of the sector and the growing recognition of the potential of Scottish healthtech companies to develop innovative solutions to some of the world's biggest healthcare challenges.

It is also worth noting that Scotland's healthtech ecosystem is well-supported by a number of government and industry initiatives, such as the Scottish National Health Service (NHS) Scotland Health Innovation Hub and the Life Sciences Scotland industry body. These initiatives are helping to create a supportive environment for healthtech companies to thrive.

"At the top is Glasgow-based Amphista Therapeutics, which raised $50m in 2022. The biotech company is a spin-out of the University of Dundee and develops targeted protein degradation medicines, which have the potential to treat serious diseases that currently have limited treatments.

Potential treatment areas for the company's small molecule degrading therapeutics include immunology, oncology and central nervous system disorders. In oncology, Amphista’s therapies have shown evidence of being able to slow or stop tumour growth.

Just behind in second place with a value of $44m raised in 2022 is Resolution Therapeutics, which specialises in developing macrophage cell therapies to treat chronic liver disease.

Resolution Therapeutics is a spin-out of the University of Edinburgh. The company is an example of how Scotland’s healthtech ecosystem and support network enable collaborations in projects, which can develop into start-ups or spin-outs that turn potential medical treatments into a reality.

Resolution Therapeutics is the result of a partnership between Edinburgh’s Centre for Regenerative Medicine and the Scottish National Blood Transfusion Service, with backing from Syncona Investment Management. The startup is based at Edinburgh Royal Infirmary Campus in the Centre for Regenerative Medicine.

The majority of the top ten start-ups and spin-outs are based in and around Edinburgh and Glasgow. Yet outside of Scotland’s two biggest cities, Inverness-based ODx manufactures innovative urine testing solutions that rapidly identify antibiotic susceptibility.

The company raised $10m in 2022. ODx is based at a purpose-built life sciences facility at the Inverness Campus, which is an enterprise area established by the Scottish Government and shared with other start-ups and spin-outs in the pharma and healthcare sector that could well break into this top ten list in future."

Source: https://www.investmentmonitor.ai/sponsored/assessing-worldwide-healthtech-growth-how-the-uk-and-scotland-are-positioned/

Future of Scottish HealthTech:

The future of the Scottish healthtech market is bright. The sector is already growing rapidly, and there are a number of factors that are likely to drive further growth in the coming years.

Venture Capital Investment in Scotland: Scotland bucked international trends in 2022 after a record-breaking £705m in venture capital was invested in scale-up companies. The nation’s level of VC support increased by 12 per cent year-on-year, against an overall 30 per cent decline in volumes across the UK, according to accountancy giant KPMG. (1)
Pioneering healthcare: Scotland has a long history of pioneering healthcare. The country was one of the first in the UK to scrap prescription fees, and it is also leading the way in areas such as digital health and artificial intelligence. This pioneering spirit is likely to continue to drive innovation in the healthtech sector.
Collaboration: There is a strong culture of collaboration between healthtech companies, universities, and the NHS in Scotland. This collaboration is helping to accelerate the development and adoption of new health technologies.
Talent: Scotland has a well-educated workforce with a strong track record in science and technology. This talent pool is a major asset for the healthtech sector.

(1) https://futurescot.com/scotland-bucks-international-trends-for-vc-investment-in-2022/

These factors suggest that the Scottish healthtech market is well-positioned for continued growth in the coming years. Some of the specific areas where growth is likely to be seen include:

Digital health: Digital health technologies, such as remote monitoring and virtual care, are already being used in Scotland to improve patient care. This trend is likely to continue, as digital health technologies become more affordable and accessible.
Artificial intelligence: Artificial intelligence is being used in a variety of ways in healthcare, such as to develop new diagnostic tools and to improve the efficiency of clinical workflows. The use of AI in healthcare is likely to grow in the coming years.
Precision medicine: Precision medicine is the use of genetic and other data to tailor treatments to individual patients. This is a rapidly developing field, and Scotland is well-positioned to be a leader in precision medicine.

The future of the Scottish healthtech market is bright. With strong investment, a pioneering spirit, and a well-educated workforce, Scotland is well-positioned to become a potential European leader in HealthTech.

Final Thoughts:

Scotland's universities are one of the country's greatest strengths, and they play a vital role in the development of the Scottish healthtech industry.

World-class research: Scottish universities are home to world-leading researchers in a wide range of healthtech fields, including cancer, chronic diseases, infectious diseases, and digital health. This research provides the foundation for the development of new and innovative healthtech solutions.
Strong industry links: Scottish universities have strong links with the healthtech industry. This enables them to keep their teaching and research relevant to the needs of industry and to ensure that their graduates are well-prepared for careers in the sector.
Entrepreneurial culture: Scottish universities have a strong entrepreneurial culture. This encourages students and researchers to develop and commercialize their ideas. As a result, a number of successful healthtech start-ups and spin-outs have emerged from Scottish universities in recent years.

Some specific examples of the strengths of Scotland's universities for healthtech include:

The University of Edinburgh has a strong track record in healthtech research and innovation. The university is home to the Edinburgh BioQuarter, which is one of the largest and most successful life sciences campuses in Europe. The university is also a partner in the Precision Medicine Scotland Innovation Centre, which is developing new precision medicine technologies for the diagnosis and treatment of disease.
The University of Glasgow is another leading center for healthtech research and innovation. The university is home to the Glasgow Centre for Medical Device Technology, which is one of the UK's leading centers for medical device development. The university is also a partner in the Stratified Medicine Scotland Innovation Centre, which is developing new stratified medicine technologies to improve the diagnosis and treatment of cancer.
The University of Dundee is also a major center for healthtech research and innovation. The university is home to the Dundee Cancer Centre, which is one of the UK's leading cancer research centers. The university is also a partner in the Tayside Medical Devices Centre, which is a one-stop shop for medical device companies seeking support and guidance.

In addition to these three leading universities, other Scottish universities with strong healthtech research and innovation capabilities include the University of Aberdeen, the University of St Andrews, and the University of Strathclyde.

Overall, Scotland's universities have a number of strengths that make them well-suited to support the healthtech industry. These strengths include world-class research, strong industry links, and an entrepreneurial culture.

As a result, Scotland is a leading centre for healthtech research and innovation, and Scottish universities are playing a major role in the development of new and innovative healthtech solutions.