There is still a “huge gap” between the start-up ecosystem in the Golden Triangle and the North, writes Gordon Bateman, founder of Investor Ladder and Climb24. To break down those barriers, there’s still work to do to create more opportunities for collaboration across the whole of the North.
In 2023, the UK’s startup ecosystem was valued at just under $1 trillion, making it one of the most valuable in the world. While this potential is encouraging, we are still seeing a huge gap between the Golden Triangle of London, Oxford and Cambridge and the North. In 2021 and 2022, those three cities raised $55.8bn from VCs – three times the amount more than the rest of the country combined.
The complexity of the market makes it difficult to close this gap. Competition has increased, investors are more cautious and, for founders based outside of the capital, getting access to the right people is a barrier.
On the flipside, investors are starting to seek out opportunities beyond London, and I am having more conversations with those based both in the UK and overseas that are actively seeking to back innovation in the North. However, if we are going to capitalise on that interest then we need to maximise local opportunities, as well as encouraging neighbouring cities to collaborate better.
This starts with promoting some of the investment opportunities available to startups on their doorstep. Local funding remains absolutely critical, and we have worked with many business founders to help them secure grants, match funding and other types of support from local authorities and the Northern Powerhouse Investment Fund, amongst others. These have been invaluable in helping to put them in a stronger position for future investment.
It’s also important to remember that the amount you’re trying to raise doesn’t have to come from one source. Manchester-based GigPig is a great example of a company that has raised £1.3m from VCs and angel investors based in London, Lincoln, Liverpool and beyond.
As well as championing local resources however, it’s important that we are also thinking bigger, and creating more opportunities to collaborate across the whole of the North. This doesn’t mean diluting local networks – rather, that we bring those networks together so that, when international funds look at the North, they see a critical mass.
Part of the reason London is so attractive is the density of startups there. International VCs can spend a few days in the capital and connect with a wide range of organisations. They simply don’t see that same concentration regionally – or know that it exists.
I also still see scenarios where London investors are more likely to get on a plane to San Francisco than journey to Sheffield – because that’s where the greatest potential is perceived to be. To change that, we need to be banging the drum louder. And that can only happen when we come together in greater numbers.
Manchester Digital’s manifesto for the northern tech economy is one example of an initiative that is working to encourage greater collaboration. Its ‘Northern Tech Nexus’ (NTN) proposes bringing together neighbouring city-regions to form a tech ecosystem, which would feature a new annual international summit.
Good things happen when we make new connections and creating opportunities for startups, investors and the wider ecosystem to come together is essential in championing the innovation happening in the North. James Sutherland, founder and CEO of Autonomo Technologies, is a great example of someone who has embraced this. He attended Climb23 in Leeds last year and secured a £2m investment from a Northern-based fund.
When we collaborate and work more closely together, we can redress the balance, empower startups to become more attractive nationally and internationally, and create opportunities across the whole of the UK.
