The Scottish National Investment Bank has announced plans to launch its first fund, the Scottish Universities Fund, putting up to £65 million of cornerstone capital behind businesses emerging from Scotland's universities. The fund will begin investing in spring 2027 and is designed to help university-linked companies grow from early-stage development to scale-up.

The Bank says the fund will also address a shortage of capital for spin-outs by mobilising additional private investment. It will act as a central point to engage investors, founders and partners, and will work alongside the Bank's existing investor network, including Scottish Enterprise, to support the wider innovation ecosystem.

Two investment strategies

The fund will offer two investment strategies. The Ignition Strategy will fund pre-seed to seed businesses, deploying early-stage capital in seed rounds of £250,000 to £1.5 million. Of the Bank's £65 million cornerstone investment, £15 million is earmarked for these investments.

The remainder will be used in the Accelerator Strategy, which will contribute to Series A and later funding rounds, enabling companies to scale. Those rounds are expected to be in the region of £2 million to £8 million.

Focus on Scotland's research strengths

The fund is sector agnostic but will focus on areas aligned with Scotland's research strengths, including health and life sciences, energy transition, data and digital technologies, and advanced manufacturing.

David Ritchie, chief executive of the Scottish National Investment Bank, said: "Scotland's universities are among our greatest national assets. They produce world-class research, exceptional entrepreneurial talent and breakthrough ideas that can support long-term economic transformation." He added that founders can struggle to access the capital and business support needed to commercialise innovation, and that the fund is designed to help address that gap and create stronger pathways for ambitious companies to start, scale and stay in Scotland.

Alyn Smith, Minister for Innovation, Technology and Tertiary Education, said that by working with the Bank and universities to draw in private capital, Scotland is helping more of its research become high-growth companies that start, scale and stay in the country, including in areas where Scotland has real strengths, from health and life sciences to the energy transition and data and digital technologies.

Universities invited as partners

Universities are not required to invest in the fund to take part. Instead, they are invited to become strategic partners, helping to strengthen the pipeline of innovation and commercial opportunity emerging from their institutions.

Sir Jim McDonald, Emeritus Principal of the University of Strathclyde and co-author of Scotland's National Innovation Strategy, said the fund represents an important opportunity to strengthen the connection between research, innovation and commercial growth. The strategy, commissioned by the Scottish Government, recommended the creation of such a fund. The Bank says its ambition is not simply to provide capital, but to help build a stronger innovation ecosystem, attract additional private investment and ensure more of the value created by Scottish innovation is captured in Scotland.

Source: Scottish Financial News and Scottish National Investment Bank investment strategy.