UK startup ecosystems on the rise outside London

The UK’s startup ecosystem is a world leading startup ecosystem, the #1 tech ecosystem in Europe and #3 tech ecosystem globally behind the US and China for VC investment.

Whilst the lion’s share of VC investment has traditionally gone into London startups, in recent years there’s been a rapid growth of VC investment and innovation seen across other parts of the UK. Notable VC investment growth can be seen in hubs such as Glasgow, Belfast and Bristol amongst others.

In this article, I’ll present this shift in increasing VC investment trend into startups outside of London and some notable startup ecosystems including Glasgow, Belfast and Bristol which are on the rapid rise in recent years.

Venture capital funding is becoming increasingly decentralized, with VC investment expanding all across the UK

• Whilst the lion’s share of VC investment has been going into startups based in London, a total of $13.5B in 2023, which made up 65% of total UK VC investment for the year
• This has actually been on the decline from highs seen in 2019 where London’s proportion of VC investment for the UK was at 75%
• The share of VC investment growth into startup ecosystems in London has been on the rise as a result, thanks to the rapid growth seen in cities across the UK as seen later in the article below.
• Explore this data and breakdown of VC investment by region in the UK here on the Dealroom platform.

VC investment is growing fastest in the West Midlands, Glasgow and NI.

The below table showcases selected leading startup ecosystems distributed across the UK, with their VC investment volumes seen in 2023 as well as pre-pandemic investment growth rates seen between 2019 to 2023.

• Birmingham sees rapid growth in 2023, primarily thanks to a megaround that was raised by Robotics startup Conigital, which was also one of the largest funding rounds seen in the UK outside London in 2023.
• UK entrepreneurship is distributed throughout the country. Investment is growing fastest in the West Midlands, Glasgow and NI.
• Compare VC investment trends by UK regions and cities here on the Dealroom platform.

Notable UK growing startup ecosystems: Glasgow, Belfast and Bristol

Glasgow City Region

• Glasgow startups raised a record amount of VC investment in 2023, totalling $224M, more than 2x that seen in 2022 and 21% higher than the second best year seen in 2021.
• 3 of the 5 largest funding rounds to date into Glasgow's startup ecosystem were raised in 2023 from Chemify, ENOUGH and HVS
• 2023 was record year for Healthtech VC investment, up 2.6x on second best year seen in 2021 from £85.6M in 2023 from £32.1M in 2021 - data here.
• Healthtech startup investment made up 50% of VC in 2023 - data here.
• Explore our Invest Glasgow startup ecosystem platform to explore all startups and funding round trends operating in the Glasgow City Region.

Belfast

• 2023 was the second best year on record for VC investment into Belfast startups at $123M, down only $5M from the record year in 2022 as seen in the table above.
• Northern Ireland’s largest privately operated EV charging network, Weev, raised the Belfast and Northern Ireland’s largest startup funding round in May of last year, a total of £50M.
• Explore the growth in VC investment trends in Belfast's startup ecosystem here on the platform.

Bristol

• Energy and Climate Tech startup OVO Energy raised 2023’s largest funding round for Bristol and the largest climate tech related funding round outside of London in 2023.
• Since 2018, there's been an notable increase in the size of funding rounds going into Bristol based startups across a range of industries including fintech, energy, transportation and health - explore this trend seen above of these larger funding rounds here.
• Explore the growth in VC investment trends in Bristol's startup ecosystem here on the platform.

Which emerging startup ecosystems in the UK 2023 experienced record levels of investment?

• Glasgow startups raised a record amount of VC investment in 2023, totalling $224M, more than 2x that seen in 2022 and 21% higher than the second best year seen in 2021, thanks in part to strong investment into healthtech startups - explore the investment data here.
• Sheffield startups also raised a record amount of VC investment in 2023, totalling $300M, thanks in part to Venterra, an offshore wind energy company which raised a £150M Growth Equity VC round in 2023, half of the city's ecosystem total investment for the year. Explore this VC investment data into Sheffield startups here
• Birmingham saw 15x growth in VC. investment growth in 2023 against 2022, thanks to a megaround that was raised by robotics startup Conigital. Explore other funding rounds into Birmingham here on the platform.

Related Content

• UK innovation ecosystem report 2023: Explore our most recent report 2024 outlook report on the UK ecosystem here.
• UK Ecosystem Guide: All the need-to-know stats and trends in technology, innovation and entrepreneurship for the UK startup ecosystem, visit our dedicated Guide here
• UK reports: Explore all our UK tech startup ecosystem reports here
• Invest Glasgow Startup Ecosystem platform: Explore the Glasgow City Region tech ecosystem: A platform built by and for founders, investors, executives and tech enthusiasts here.
• UK Data Commons startup ecosystem platform: Explore the UK tech ecosystem: A platform built by and for founders, investors, executives and tech enthusiasts here.