Raising Partners founder Helena Murphy has warned that time is running out for Scotland to become a force on the global tech scene, as she calls on the Scottish Government to look towards the Baltic region for inspiration.
The managing director of the London and Edinburgh-based early-stage investment firm argued that despite having a population of just 1.32 million, Estonia’s tech industry has thrived since separating from the Soviet Union in 1991, becoming a breeding ground for tech success, with prominent examples including Skype, Bolt and Transferwise.
Per capita, Estonia is the European leader when it comes to start-ups, investments and unicorns - privately held companies with a value over $1bn - having been the birthplace of 10 separate businesses going on to achieve the status.
By comparison, Scotland has produced three - Skyscanner, FanDuel and BrewDog - despite its population dwarfing Estonia by over four to one.
Murphy founded Raising Partners in 2017 after becoming frustrated at the lack of finance options for growing businesses. Her company has since gone on to help grow the likes of Celtic Renewables, generating more than £3.7m from 2,500 investors, while securing in excess of £2.8m for Plum Guide, eclipsing its £1m target.
The Glasgow-based entrepreneur believes Scotland should follow the Estonian example by giving fledgling companies the financial kickstart they need, before following up with continued scale-up support.
As well as calling for the development of tech skills to be embedded within Scotland’s education system, Murphy is also challenging those at Holyrood to recruit Scottish expats who have forged successful careers in the sector internationally to provide industry expertise.
“There’s so much untapped potential in the Scottish tech sector, but we’re simply not harnessing it - we’re sitting on a pot of gold, but our policymakers aren’t doing enough, fast enough to unearth it,” she commented.
Last month, the Startup Grind Scotland cohort travelled to Finland on a fact-finding mission backed by the government and enterprise agency Scottish Development International.
Some of Scotland’s most promising tech entrepreneurs - including Brillband founder Duncan Di Biase and Victoria Fullarton of Toto Sleep - were joined by tech incubator CodeBase in a bid to generate new connections with the global start-up community, while equipping themselves with best practice for ecosystem-building from the Finnish model.
However, Murphy believes that across the Gulf of Finland, Scots can also learn valuable lessons in how to grow their tech business into a global enterprise from industry pioneers in Estonia.
“Not long after Estonia’s independence, the government gathered successful founders and held a forum about how to properly harness and mobilise this business acumen, before backing bright new entrepreneurial ideas with the required financial investment; incubated talent in Estonia then travels far and wide to top international markets.
“But once these budding business minds have become experienced entrepreneurs and professional operators, they continue to feed back into the Estonian entrepreneurial landscape, either through remote mentorship or actually returning home to work for Estonian companies – it may seem a simple strategy, yet it’s one our government isn’t implementing.“
Murphy continued: “In Scotland, we’ve witnessed international success stories - the Scottish Government continues to dine out on Skyscanner - but after businesses make their mark on the global stage, there’s a disconnect.”
In July, the Scottish Government appointed Mark Logan as its chief entrepreneur. Occupying a two-year post, the former Skyscanner chief operating officer will be a senior adviser to the government’s start-up nation programme which was set up to implement the recommendation for entrepreneurship in the Scottish Government’s 10-year economic strategy, published in March.
Logan has since voiced concerns there isn’t enough focus on the economy, while revealing plans for a new public and private fund to give Scottish start-ups the support they need to succeed.
Murphy, who has helped more than 160 companies raise in excess of £6m, has previously claimed the Scottish venture capital sector has behaved like an “old boys’ network” which avoided risk and limited the ambitions of entrepreneurs by keeping valuations low.
She also argued that Glasgow should have a 10-year target to become the Silicon Valley of the UK, citing ease of access to top tech talent, top universities and the attractiveness of lower cost of living than in London.
“Although there’s hope the public sector is heeding Mark’s recommendations and taking tentative steps towards transformative action, we’ve been here before.
“Fact-finding and network-building missions to the likes of Finland and the US will always be welcome, but we need to view the Estonian model as inspiration that we can grow industry-leading tech start-ups by following the path forged by previous Scottish success stories.
“By harnessing our very own expertise in conjunction with lessons we can learn from overseas - and upping levels of investment - Scotland can finally reach its full potential and have far more unicorns make their mark on the global stage,“ she added.
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