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Background Induced pluripotent stem-cell derived endothelial cells (iPSC-ECs) can be generated from any somatic cell and their iPSC sources possess unlimited self-renewal. Previous demonstration of their proangiogenic activity makes them a promising cell type for treatment of ischemic injury. As with many other stem cell approaches, the low rate of in-vivo survival has been a major limitation to the efficacy of iPSC-ECs to date. In this study, we aimed to increase the in-vivo lifetime of iPSC-ECs by culturing them on electrospun polycaprolactone (PCL)/gelatin scaffolds, before quantifying the subsequent impact on their proangiogenic function. Methods iPSC-ECs were isolated and stably transfected with a luciferase reporter to facilitate quantification of cell numbers and non-invasive imaging in-vivo PCL/gelatin scaffolds were engineered using electrospinning to obtain woven meshes of nanofibers. iPSC-ECs were cultured on scaffolds for 7 days. Subsequently, cell growth and function were assessed in vitro followed by implantation in a mouseback subcutaneous model for 7 days. Results Using a matrix of conditions, we found that scaffold blends with ratios of PCL:gelatin of 70:30 (PG73) spun at high flow rates supported the greatest levels of iPSC-EC growth, retention of phenotype, and function in vitro. Implanting iPSC-ECs seeded on PG73 scaffolds in vivo improved their survival up to 3 days, compared to cells directly injected into control wounds, which were no longer observable within 1 h. Enhanced engraftment improved blood perfusion, observed through non-invasive laser Doppler imaging. Immunohistochemistry revealed a corresponding increase in host angiogenic mechanisms characterized by the enhanced recruitment of macrophages and the elevated expression of proangiogenic cytokines vascular endothelial growth factor and placental growth factor. Conclusions Knowledge of these mechanisms combined with a deeper understanding of the scaffold parameters influencing this function provides the groundwork for optimizing future iPSC-EC therapies utilizing engraftment platforms. The development of combined scaffold and iPSC-EC therapies could ultimately improve therapeutic angiogenesis and the treatment of ischemic injury. Electronic supplementary material The online version of this article (10.1186/s13287-018-0824-2) contains supplementary material, which is available to authorized users.