- Start-ups in Wales and Yorkshire broke the global trend of a post-pandemic funding slump
- huge majority of founders are optimistic about the market for selling or listing their company, but are most likely to exit by selling to international buyers
- research follows new campaign to get British investors to back science and tech, or risk opportunities going abroad
Science and technology start-ups in regions across the UK broke global trends to grow private sector investment in 2023, according to new research.
Businesses in Yorkshire and Humber saw a huge uplift of 20% in venture capital investment through the period, reaching new highs of over £200 million of investment in 2023. Welsh companies also attracted more investment in 2023, with funds raised increasing by 8.7% to £112 million.
Investment levels around the world tapered off after the pandemic and this downward trend did impact the UK, however the UK maintained its lead in Europe, and returned investment closer to pre-pandemic levels.
Now, according to the research from Barclays Eagle Labs, more than half of founders (54%) say the availability of funding is holding back their company's growth.
These results follow the Department for Science, Innovation and Technology (DSIT) launching a new campaign aimed at driving up domestic investment opportunities in scale-ups. The 'Science and Tech is our Superpower' campaign aims to make sure growth-ready firms in the sector can access the funding they need from the UK to scale their success, boost long term economic growth and create jobs.
Launching the research at Barclay's Eagle Labs Industry Bridge event, which helps tech start-ups grow by connecting them with major industry players, Technology Minister Saqib Bhatti said:
Whether it's in AI, chips or bioscience, British science and tech start-ups 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.
When looking at mergers and acquisitions, tech founders were overwhelming optimistic (65%) about what the UK landscape meant for the next stage of their start-up journey.
Though preferences were split, founders suggest that selling their business to an international buyer (15.8%) is their most preferred 'exit strategy'.
While this was closely followed by selling through private equity (15.5%) or to a UK buyer (14.4%), it shows that many of Britain's best home-grown investment opportunities could move abroad.
Amanda Allan, Director of Barclays Eagle Labs said:
At Barclays Eagle Labs we recognise that access to capital and funding is important to ambitious tech businesses. As such we've put a range of support in place to assist businesses navigate the UK's funding landscape including growth programmes, such as the Funding Readiness Programme, which we run 4 times per year, and connectivity tools such as Barclays Demo Directory.
DSIT's new push to promote private sector investment in high-growth companies comes after the Chancellor's Mansion House Reforms, which are unlocking up to £75 billion for high growth businesses like tech start-ups, underpinned by a commitment from UK pension funds and the venture capital community to work together to drive even more finance into scale-ups.
Targeting investors in key financial hubs across the country in cities such as London, Birmingham, Edinburgh, Belfast and Cardiff, the campaign will run on billboards strategically placed 200 metres within investor offices and on key commuter routes. Wrapped copies of The Times will also be delivered to venture capital offices, and digital adverts will run online and across podcasts.
