Exits seen from both sides, by Nick Freer

“Exits seen from both sides” was the the theme at the annual Young Company Finance conference at the Surgeons Quarter in Edinburgh earlier this month, so it was appropriate that host and speaker Ana Stewart, a partner with impact investment firm Eos, relayed some of her experiences as both a startup founder and investor.

Doug Lawson, founder of MarktoMarket, a data platform for advisers, investors, and corporates operating in SME markets, outlined how February 2021 was a zenith point for deals and exits, following a nadir moment during the spring of 2020.  And in spite of the headlines around a declining deals market in 2023, Lawson said the M&A market is reasonably strong against an exceptional 2021.

When it comes to data, the devil is in the details, and while overall deal volume is only down slightly this year, there has been a sharp drop-off in scaleup capital in the £10 million plus range, and Scotland continues to underperform London and the South-East by a “substantial amount”.

Richard Lennox, who was involved in six of Skyscanner’s acquisitions during his time as a lead engineer with the online travel search site, and is now with Current Health helping to guide integration following the second largest European healthcare technology exit ever when Best Buy acquired the company for $400 million in October 2021, featured on one of the panels.

In response to a question on hiring from conference sponsor and recruiter Eden Scott, Lennox advised hiring a team to build the company, not for an exit, and to have a laser focus on product and customers.

Mark Robinson, founder and CEO of DeltaDNA, the games industry analytics company acquired by San Fransisco-headquartered Unity Technologies in 2019, said “startups are about survival” and expressed the importance of nurturing strategic partners on the basis that “the better you are networked, the better your chances for exit”.

Paul Atkinson, founding partner of Par Equity, the investment firm that was an early investor in both Current Health and DeltaDNA, said both company’s leadership teams had a deep understanding of their ecosystems and, as Atkinson put it, “that’s what we’re looking for”.

John McNicol, founder and director at Kelvin Capital concurred, “we partner with people not businesses”, and McNicol highlighted the value associated with the CFO role: “A good CFO will cost more, but is worth it, as a poor CFO can kill your business”.

M&A, deals, and investment rounds are a big part of my own agency.  While Skyscanner and Blackcircles are some way back down the road in the rear view mirror, both shaped our approach to providing strategic PR on a company’s path to transactions and exits.

This year, we have again advised on multiple deals, including LGT’s £140 million acquisition of abrdn’s discretionary fund business in the UK, The Paint Shed’s acquisition by Brewers, and Chemify’s £33 million Series A investment.

This week, we managed media relations around Paul Reid-led Trickle’s £1 million round led by Equity Gap, and the £1.9 million investment into Neuranics, a joint spinout from the University of Glasgow and the University of Edinburgh.  It was also good to see another client, fast-growth tech group Stellar Omada, receive £4.5 million of backing from BGF.