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UK regional science and tech startups grew in 2023

Globally there is still a post-pandemic funding slump, but UK startups in regions such as Wales and Yorkshire grew private sector investment in 2023

Science and technology startups in Yorkshire and Wales managed to significantly increase private investment over the last year.

Research from Barclays Eagle Labs found that most of the world is still suffering from a post-pandemic funding slump as a hangover from the Covid-19 coronavirus outbreak, but regional startups in the UK bucked this downturn.

While reduced investment levels around the world did impact the UK, in 2023 private investment crept up closer to pre-pandemic levels. However, more than half of founders (54%) said availability of funding is holding back their company’s growth.

The research found that businesses in Yorkshire and Humber had a 20% increase in venture capital investment, with a total of more than £200m invested in local startups during 2023. Welsh companies also managed to bring in more investment, raising £112m in 2023, an increase of 8.7%.

It also found that 65% of founders of tech and science startups are optimistic about the market for selling or listing their company, but selling to an international buyer is the preferred route, ahead of selling through private equity or to a UK buyer.

Launching the research at Barclay’s Eagle Labs Industry Bridge event, which aims to help startups connect with major industry players, technology minister Saqib Bhatti said: “Whether it’s in AI, chips or bioscience, British science and tech startups are thriving all over the country, and many are ripe for investment. 

“We need investors to match the ambition of UK founders, and back British innovation before our best investment opportunities travel abroad for the funding they need to grow.” 

The Department for Science, Innovation and Technology (DSIT) has also launched a campaign called “Science and tech is our superpower", aiming to ensure startups can access the funding they need to scale up from the UK, rather than going abroad.

The campaign will run on billboards, strategically placed within 200 metres of investor offices and on key commuter routes in financial hubs across the country in cities such as London, Birmingham, Edinburgh, Belfast and Cardiff.

In January 2024, science and technology secretary Michelle Donelan said it is her ambition for the UK to match US levels of venture capital investment as a proportion of gross domestic product (GDP), which would mean an extra £5bn a year.

Donelan said businesses looking to scale up should not have to leave the UK to get the investment they need.

“Now is the time to cement the UK’s reputation as the most stable, the most innovative and the most rewarding place to invest and deliver on our science and tech superpower ambitions,” she said, adding that by 2030, the UK “should account for at least 50% of all new unicorns created by Europe as a whole”.

DSIT also recently launched a tech talent campaign, encouraging more people to sign up to free technology skills bootcamps, aiming to plug gaps in British tech talent.

Read more about tech startups:

  • ChipStart is a new initiative from the UK government to help build out the National Semiconductor Strategy by supporting startups.
  • Trade group TechUK publishes blueprint calling for winner of next election to boost tech startups, digitise government services and accelerate technology R&D.  
  • The Scottish Techscaler programme is piloting its first overseas hub, which will have space for 12 startups wanting to grow their businesses.

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