Cambridge is leading regional tech hub as UK draws record investment
The UK technology sector drew a record £29.4bn in investment this year, according to research, with Cambridge declared the country’s leading regional tech city.
The bumper injection of funding from venture capitalists, who invest in new companies by taking stakes in them, is more than double last year’s total of £11.5bn.
The number of unicorns – startup firms worth more than $1bn (£750m) – reached a high of 29 in 2021 including Depop, the British secondhand fashion resale app sold to US online marketplace Etsy for $1.6bn this year, and the car-selling platform Motorway.
This increase in $1bn companies brings the total number of unicorns in the UK to 116, according to figures published by the government’s Digital Economy Council, an advisory committee. This compares with 31 in France and 56 in Germany, according to the DEC.
References to the government’s levelling-up policy, which seeks to reduce the wealth and opportunity gap between London and the rest of the UK, featured heavily in the DEC research. It declared Cambridge the leading regional tech city in the UK, ahead of Manchester and Oxford, reflecting factors including its high levels of venture capital funding and number of unicorns. Edinburgh, Cardiff and Belfast are also in the top 10.
“The UK is very good at rearing and cultivating startups and scale-ups into successful global companies right across the UK,” said Gerard Grech, the chief executive of Tech Nation, a government-backed industry group. “A true network of digital excellence is emerging right across the country through entrepreneurship, driving new job and wealth creation.”
According to figures compiled by the data firm Dealroom and job search engine Adzuna, the number of tech jobs increased by 165% in Manchester last year while the highest tech salaries outside London, still the UK’s main tech hub, were in Edinburgh at an average of £58,405.
Adzuna’s co-founder, Andrew Hunter, said that while there had been a “surge” in tech hiring across the UK, finding skilled staff to fill positions was a problem. “The struggle for businesses across the country is having enough skilled staff to fill these positions to allow them to keep growing,” he said.
The research stated that about 30% of the £26bn in venture capital funding in UK tech last year went into companies outside London and south-east England. The regions were home to nine of the 29 unicorns formed this year, including Interactive Investor in Glasgow – an online investment platform – and the electric aircraft firm Vertical Aerospace in Bristol.
Most of the venture capital money coming into the UK is from the US, accounting for 37% of investment, with 28% coming from domestic firms.