After 30 years and more than £160 million of investment in Scottish start-up companies, the Archangels network has seen the economic cycle turn a good many times. Though the current landscape is “concerning”, joint managing director Niki McKenzie remains upbeat about the pipeline of new ideas and technologies emerging from the country’s universities.

Marking its latest anniversary earlier this year with a dinner at the National Museum of Scotland, all 20 companies in the Archangels portfolio took part in a trade show for the group’s network of 120 active members. Discussions, according to Ms McKenzie, were a mixed bag of unease at the macro level alongside enthusiasm at the micro level.

“You can imagine that in our network there are lots of people tracking markets very closely – there was lots of dialogue and chat about that,” she said.

“But in terms of supporting the portfolio companies and the activity that is going on and the new opportunities our people are seeing coming through our pipeline, people are upbeat about that.”

Raised in Dumfries where her father was a grain merchant, Ms McKenzie went to Dumfries Academy before heading to the University of Edinburgh to study accountancy. She qualified as a chartered accountant with KPMG and later joined the structured finance team at the Bank of Scotland.

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“Nobody in my family had ever been to university, so the accountancy was a funny thing, but I really loved it, and I loved my training at KPMG,” she said.

“As a qualification it offers lots of different routes. I think I was always going to do a job in finance, and it was just a question of which area to work in.”

A chance meeting at a party for a mutual friend 11 years ago brought her to Archangels, which she is now in charge of alongside David Ovens. They are joint managing directors.

“It’s very, very different from working on those large deals at the bank to what we are doing at Archangels, which is really early-stage start-up companies, many of which don’t have any revenue, but they have some great disruptive technology,” she said.

“The technologies and the companies and the people we work with are what stand out for me. There are some really exciting technologies in Scotland – there is lots coming out of the universities, where you are taking world-leading research and maximising the opportunity of that.”

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The current portfolio is “quite mature”, with firms such as Arrayjet and BioCaptiva having completed several rounds of funding.

The majority of the companies the network has invested in during the past were exited via trade deals, such as the £27.5m sale of Livingston-based robotic limb developer Touch Bionics to a larger Icelandic rival in 2016. A further notable deal was the 2015 sale of Dundee’s CXR Biosciences to Manchester-based Concept Life Sciences for an undisclosed sum.

“On the trade sales what I would say is that almost all of the companies we have done a trade sale for have stayed in the country and have gone on to receive significant investment from their acquirers,” Ms McKenzie said.

“Almost all of them have gone on to grow and employ more people and be very successful under their new owners. Our investors are very proud of that.”

Along with Archangels’ maturing portfolio, Ms McKenzie also points to what she sees as an evolution in the wider early-stage investment community. There are nearly 20 active angel networks in Scotland at the moment, and there has also been an increase in co-investment from venture capital and private equity firms.

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This, she believes, is edging the ecosystem in a direction where it will be possible to build businesses of a bigger scale with better chances of securing both an independent future and returns for investors.

“I have been here for more than 10 years and the maturing I have seen during that period in our early-stage system is really marked,” she said.

“You are starting to get some bigger exits like Skyscanner, and all of that expertise on the boards and the management teams is getting recycled back in and is encouraging the companies coming behind them to go further and to have greater ambition.”

The group’s most recent new investment was this year when it provided a first round of £1.5m in funding to Edinburgh-based Earth Blox, whose software uses data from the Google Earth engine to allow anyone to analyse images gathered by satellite.

Ms McKenzie said this is illustrative of the disruptive technologies coming out of Scotland that are receiving “good interest” from both angel investors and larger industry players.

“Our members are very supportive of the portfolio and in good heart about the activity going on, particularly when investing in technologies that are pushing the boundaries – there certainly seems to be good appetite for that.”


What countries have you most enjoyed travelling to, for business or leisure, and why?

Venice during the Carnival in February. Standing in a misty St Mark’s Square at daybreak watching people who have travelled from all over the world to promenade in the most extraordinary costumes – unforgettable.

When you were a child, what was your ideal job? Why did it appeal?

When I was 13 my best friend said we should both go to Edinburgh University – she would study English Literature and I would do Accountancy. I had no idea what an accountant was but she said her brother-in-law was one and she thought I would be good at it. Five years later that’s exactly what we did. Great careers advice.

What was your biggest break in business?

Bumping into the then chief executive of Archangels at a party for a mutual friend. I said I thought he had one of the best jobs in Scotland. He confirmed that to be true and I asked if he had any jobs going. Within a week I was helping one of the portfolio firms with a business plan and learning about toxicity in drug development.

What was your worst moment in business?

When you are working with early-stage businesses, there are always problems to be faced as unexpected issues arise – and it’s never the ones you were expecting. You need good people around you to analyse, come up with the options and make the decisions. The decisions will not always be the right ones but you will learn something.

Who do you most admire and why?

My mother. She travelled from home to university while in her fifties to start a new career. She embodies purpose and determination to use the skills you have to make a difference. I have seen her quietly get on with things and change them for the better. Her patience and kindness continue to inspire.

What book are you reading and what music are you listening to?

I have just finished The Lincoln Highway by Amor Towles – a cracking yarn.

All my Spotify music is from the 80s and 90s.