Scotland’s scaleups being held back by £25m glass ceiling

At an industrial strategy roundtable in Glasgow, investors, manufacturers and public agencies agreed that while Scotland performs strongly in spinouts and early-stage funding, the transition to scale remains the system’s weakest link.

Participants at the event, held in partnership with the British Business Bank and Scotsman Insider, identified a recurring pressure point once businesses approach £25 million in revenue.

At that stage, funding options narrow and companies struggle to secure the patient capital required to expand into larger international markets.

Michelle Ferguson OBE, Scotland director at the CBI, said: "We continue to see a real gap once businesses reach the £25 million-plus stage.

"In places like Manchester, companies are scaling more quickly because they can access patient capital at that level.

"That is exactly the stage where the risk is that businesses look to the US, and the last thing we want is Scottish companies feeling they have to relocate to grow."

Skills shortages are also compounding the challenge.

Paul Sheerin, chief executive of Scottish Engineering, said “The fundamental problem is that the UK skills system still assumes a world of large manufacturers with big training academies.

“In reality, we are a nation of SMEs with limited visibility of future orders, yet we expect them to commit to apprenticeships that take four to five-and-a-half years of investment commitment to deliver.”

Investors also pointed to the decline of specialist funds in sectors such as life sciences, making it harder to build strong syndicates and attract overseas backers.