Tech North Advocates

The UK's tech sector showed significant growth and resilience from 2019 to 2023, despite a challenging funding environment in 2023. The sector saw substantial equity investment and the development of tech hubs across the country, including notable clusters in the North of England.

The tech company population grew by 1.72% to 407 companies in 2023. Equity investment declined 4.76%, but grant funding increased by 15.4%, driven largely by a single significant grant to Nova Pangaea Technologies. The digital sector in the North East is growing four times faster than the wider regional economy.

This region has the largest tech company population among the northern regions, with 1,261 active companies. Investment plummeted by 98.5% to £338 million in 2023. The region's strength lies in its numerous universities and academic spinouts, with Manchester and Liverpool being the key cities.

The tech landscape increased by 1.36%, to 737 active companies. It was the only northern region to see a rise in investment, with a 19.9% increase to £201 million. This growth was supported by academic institutions like the University of Leeds and the University of Sheffield.

Manchester tech companies raised £532 million in 2022, the highest in the country outside London and the South East, and the city amassed £635 million of investment growth between 2019 and 2022. Greater Manchester had around 1,600 tech startups and scaleups as of 2022, 658 active high-growth companies, a £5 billion digital economy and 80,000 tech vacancies between May 2021 and May 2022. VC investment rose 673% over five years, and CBRE ranked Manchester number one for top tech cities outside London.

The tech sector in Leeds secured £204 million in equity across 173 fundraising events from 2019 to 2023, bolstered by government-backed support programmes and significant accelerator attendance. Sheffield's tech sector saw £128 million in equity investment over 108 deals in the same period, with the University of Sheffield playing a pivotal role through its spinouts and research centres.

Newcastle upon Tyne secured £287 million across 156 fundraisings from 2019 to 2023, with Northstar Ventures a prominent investor and the ecosystem supported by Newcastle University. Liverpool's tech sector raised £64.8 million in equity over 124 fundraisings, where crowdfunding and grants, particularly from Innovate UK, played crucial roles for early-stage companies.

Liverpool startups raised a record-high combined £94 million in 2022 across 85 equity investments. The fintech sector adds £219 million of gross value to the regional economy, the median tech salary of £40,000 makes tech the city's highest paying sector, and Liverpool ranked 3rd among the best UK cities to launch a startup in 2022. The Liverpool economy grew at an average annual rate of 2.21% over the past five years, against London's 1.83%.

There are disparities in tech financing availability between London and the northern regions, as well as challenges in accessing suitable talent and resources. The government's focus on digital skills, R&D tax credits and tech startup investment initiatives presents significant growth opportunities for the northern tech sector.