A 74% surge in Scottish equity investment has defied a wider UK market slump, driven by massive energy deals and a historic boom in university spin-out companies.

While overall UK funding for smaller businesses fell by 4% to £12.3bn, Scotland became one of the strongest-performing nations in 2025.

According to the British Business Bank’s annual Small Business Equity Tracker, published on Thursday 2 July, Scotland’s growth was supercharged by Edinburgh-based battery storage company Fidra Energy, which raised a record-breaking £445m seed-stage funding round – the largest seen in the UK since 2020.

Although overall deal numbers across Scotland dipped, reflecting tighter credit conditions, the total value of investment rose dramatically as investors concentrated capital into larger, high-value transactions.

Mark Sterritt, managing director of the British Business Bank’s Local Growth Team.

A key engine of this growth was the academic sector. Scotland comfortably outstripped London in university spin-out deals, completing 45 transactions compared to the capital’s 28.

The University of Edinburgh emerged as the nation’s powerhouse, logging 16 individual deals to rank among the top three spinout institutions in the UK.

Mark Sterritt, managing director of the British Business Bank’s Local Growth Team, said the figures represent a major positive in a challenging year.

Mark said: “The increase in investment value reflects the strength of Scotland’s businesses and its innovation base, particularly in sectors such as energy, where the country has clear competitive advantages.

“The continued resilience of Scotland’s spinout ecosystem is especially encouraging, highlighting the strength of its universities and their ability to translate cutting-edge research into high-growth companies.”

The bank is continuing to back local start-ups through its dedicated £150m Investment Fund for Scotland, which provides loans from £25,000 and equity investments up to £5m.

Under its newly published five-year plan, the institution aims to unlock £26bn in private capital alongside £13bn of its own funding to support high-growth firms.