Edinburgh-based VC announces first close of £67m led by Scottish National Investment Bank and British Business Investments
UK, 16th October 2023: Edinburgh-based venture capital firm Par Equity has today announced the launch of its new venture fund – Par Equity Ventures I LP.
The firm has secured a first close of £67m to boost innovative technology companies with high-growth potential in the North of England, Northern Ireland and Scotland. Par Equity will continue raising capital to close out the full £100m target fund size.
Backed by the Scottish National Investment Bank and British Business Investments, with further support from the Strathclyde Pension Fund, Par Equity will add further resources and capabilities to its venture programme, accelerating some of the North of England, Northern Ireland and Scotland’s most promising tech scale-ups and strengthening the talent pools in these regions.
The fund will be managed from Par Equity’s Edinburgh office, as well as its recently launched Leeds base, and will lead or support Series A funding rounds.
Certified B-Corp, Par Equity, partners with early-stage companies, operating B2B business models and with strong IP. Many of these companies are innovating in the fields of health tech, climate tech and industrial tech, often driven by new technologies such as robotics, photonics, advanced materials and artificial intelligence.
Launched in 2008 by Paul Munn, Robert Higginson, Paul Atkinson and Andrew Castell, Par Equity has invested over £160m into 77 early-stage technology companies to date, with 30 realisations, including Edinburgh-based Current Health, which was Europe’s second-largest digital health exit ever following its
sale to Best Buy.
On the fund’s launch, Paul Munn, Managing Partner at Par Equity said: “Accelerating innovation and talent in this part of the UK is an absolute priority for us and we believe that this fund can be a positive catalyst for the local tech ecosystem. Not only are we uniquely delivering capital to scaleups in the region, but we hope this fund will trigger a mindset shift to encourage and enable our very best and brightest companies to shine on the world stage.”
Andrew Noble, Partner at Par Equity, who led the fund’s launch, added: “People often forget that the North of the UK is a big market in its own right. Worth around $1 trillion GDP, it would be the eighth largest economy in Europe but is still largely overlooked by investors. We are surrounded by incredible innovation in this part of the UK, 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.
Judith Hartley, CEO, British Business Investments, said: “The Regional Angels Programme plays a vital role in developing the early-stage funding ecosystem across the UK Nations and regions. Par Equity was one of the first delivery partners of the programme, and we are really pleased to continue our support for them, through Par Equity Ventures I LP, targeting Series A follow-on commitments for smaller businesses across the North of England, Northern Ireland and Scotland.”
Ian Jamison, Senior Investment Manager, Strathclyde Pension Fund said: “SPF are delighted to have been able to support the launch of Par Equity Ventures I LP. The Fund is a great opportunity to help growth within early stage, high growth technology companies across Scotland and the North of the England and Northern Ireland, and will contribute in bridging the financing gap that exists between early-stage seed, and business angel funding, and large-scale institutional investment capital in the North of the UK”.
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.”
Par Equity’s investment model combines its discretionary managed funds with the experience of its engaged pool of sophisticated angel investors. This hybrid investment approach is drawing attention from the industry, with the firm winning Best Angel Group of the Year (UK Business Angel Awards, 2021 and 2023) and Best EIS Manager of the Year (EIS Association Awards, 2021 and 2022), as well as being selected as a finalist for the upcoming European Private Equity Awards for Venture Capital House of the Year and Venture Capital Deal of the Year in 2022.
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Par Equity is a leading venture capital firm, based in Edinburgh, investing in innovative technology companies with high growth potential, in the North of the UK. Since it was founded in 2008, Par Equity has invested over £160m across 77 companies, leveraging a further £268m of capital from third party
investors. Par Equity’s investment thesis is to combine the professionalism and rigour of a venture capital manager with the skills and expertise of a broad base of individual investors who can add value throughout the investment life cycle. This investment approach has produced strong and consistent returns across 30 realisations to date.
The Scottish National Investment Bank is Scotland’s first development investment bank, wholly owned by the Scottish Ministers on behalf of the people of Scotland.
The Bank is an impact investor, focussed on delivering both commercial returns and mission impacts with its investments. The Bank is a PLC and operationally independent from government.
The Bank invests in business and projects connected to Scotland to deliver long term, patient debt or equity investment where the private market is failing to provide the support businesses and projects
require to grow.
The Bank’s missions are:
The Scottish Government has committed to capitalising the Bank with £2bn in its first 10 years. Over time as the Bank’s initial investments are repaid, the Bank will reinvest those funds in businesses and projects creating a perpetual investment fund to support the Scottish economy in the long term. The Bank was established in November 2020
British Business Investments Limited is a wholly owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. British Business Investments aims to earn a commercial return by investing – through finance providers – in smaller businesses and small mid-caps, pursuing investments on a fully commercial basis without receiving any economic advantage from the government. Find out more at bbinv.co.uk.
The Bank and its subsidiary entities are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.
Strathclyde Pension Fund (SPF) is part of the Local Government Pension Scheme (LGPS). It is one of 11 LGPS funds in Scotland and around 100 in the UK. Strathclyde is the second largest of the UK LGPS funds. Investment in the Par Equity Northern Scale-Up Fund comes from the funds internally managed
Direct Impact Portfolio (DIP). The DIP has a Primary objective identical to overall SPF investment objective with a Secondary objective of adding value through investments with a positive local, economic or ESG (environmental, social, governance) impact. The fund is focused on the UK and the Equity, Long Term Enhanced Yield and Short Term Enhanced Yield asset categories.