Yorkshire’s tech ecosystem is gaining momentum, securing £344m in investment in 2024. But a new report by venture capital firm Par Equity warns regional start-ups are still struggling to secure funding, and without intervention, promising businesses may be at risk of relocating elsewhere.
As part of Prolific North’s on-going GRAFT series, we spoke to David Dixon, co-founder of Sheffield-based tech start-up Future Greens, to uncover the region’s strengths – and what might be missing to unlock regional growth.
“I met my co-founders during our time at the University of Sheffield. Even though we were doing different degrees, we’re all individually very passionate about fixing the food system. Three of us are from farming families originally, so we saw the food supply chain up close and we’re passionate about fixing it,” David Dixon, co-founder of Future Greens, tells Prolific North.
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Future Greens was launched in 2020 by Dixon, Alexander la Fleur, Gabrielė Barteškaitė, and Alastair Roper. The team may have started out with vertical farming ambitions, but the start-up has since pivoted towards a more sustainable approach powered by food waste, and secured a six-figure sum of investment last year.
“We saw how a vertical farm takes up a lot of energy and resources so we wanted it to be more energy efficient. We soon realised that the valuable and unique bit we were doing was converting food waste to energy. So we pivoted and are now primarily focused on building that technology that enables food and drink manufacturers to turn their organic waste into electricity and heat on site.”
Across Yorkshire and the Humber, the Northern Lights 2.0: Yorkshire’s Calling report credits a growing university spinout ecosystem as a key to regional growth, with companies like quantum computing firm Aegiq and robotics company BOW securing investor interest.
Although Future Greens is not a university spinout, Dixon hails the support Future Greens has received from the University of Sheffield. “The university has been quite supportive and we still work quite closely with several departments and we have done some grant-funded work,” he explains.
“The university has given us a lot of credibility and I believe it played a significant part in us raising our first funding round.”
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Future Greens secured a six-figure investment in 2024 Two venture capital firms have made substantial investments in Future Greens and the company has received backing from successful Sheffield entrepreneur Ashley Tate, as well as an Innovate UK grant in partnership with the University of Sheffield.
When it comes to regional challenges and opportunities, he believes the ecosystem in Sheffield is “still in its infancy”. He explains: “If you compare it to London or even to Manchester or Leeds, those cities are in a lot of ways more developed.”
But according to Par Equity’s report, Sheffield has emerged as Yorkshire’s strongest investment hub, attracting £121m in 2024. That’s more than triple that of Leeds, which snapped up £38m while businesses in North Yorkshire secured £35m.
Access to capital challenges are issues that “any start-ups face” but Dixon believes the missing jigsaw piece in Sheffield is all about unlocking opportunities and strengthening connection networks.
“In a city like London, the ecosystem has lots of events going on, lots of investors have offices nearby and they come out to socialise at networking events. I think that’s what we’re missing in Sheffield – even just the opportunity of meeting fellow founders who can then introduce you to investors or give you advice on how to fundraise.”
He credits tech entrepreneur Peter Hopton, who launched Venture.Community last year, for accelerating founder support in the region. Launched as part of UK Tech Week in Sheffield, its aim is to advance the development of hundreds of tech companies in South Yorkshire to help firms secure £100m in venture funding over the next five years.
Hopton set up data centre cooling company Iceotope and VeryPC and has previously raised more than £58m in venture funding. Initiatives like Venture.Community, plus access to capital, can help “kick-start” an ecosystem.
“Peter is an exited founder, so it’s really nice to have someone who’s gone through that process leading it, rather than a leader at the council who’s never been at a start-up before. He is doing it well, getting a lot of capital in the room that’s ready to deploy.
“Not only is that effective in getting founders to come together, as other founders can be a huge resource you can tap into, but in the long-term it’s inspiring more people to start businesses here because they can see that they don’t have to go to London to raise investment. They can stay here. I think a lot of it starts with capital.”
At one stage there were “more accelerators than businesses” across Yorkshire, so he believes more funds would help fuel the ecosystem further.
“It would be better if there was a fund built that invests £10k or £20k in an idea rather than having 10 accelerators that don’t give any investments,” he explains.
“We’ve raised funding, and it’s a bit different now, but back when we’re at university it would have been a huge motivator.”
Giles Moore, Par Equity’s regional development manager, recently revealed there is a risk that some of the region’s “most promising businesses” will move elsewhere. And Dixon admits he has pondered a move outside of Sheffield.
“If I am honest, the team has considered a move to London at times,” he says. “I go down to London at least once a month. In terms of scaling support, the tricky part about the North is there seems to be lots of knowledge, lots of money with plenty of millionaires in Sheffield, but they just don’t know the start-up world.”
Although this could be improved, he’s hopeful initiatives such as Hopton’s Venture.Community will educate people across the community about angel investing and encourage more investors to the region.
“Peter Hopton is shouting about what’s happening here and the companies doing really impressive things. It’s about showcasing that to the world, to London, the US, and making people realise what’s happening up North.
“But I do think the North does have the knowledge, support and know-how to scale and lead a business, it’s just how do we get those people connected to start-ups? How do we connect founders to angel investors? That’s a big question that nobody has been able to solve yet and in London, it seems a lot easier to access.”
Investors are “always looking for the best companies to invest in” and the Yorkshire and the Humber region has plenty to offer in the form of rising start-ups and scale-ups.
“Scaling is next,” Dixon says about Future Greens ambitions. “We’ve found a way to convert organic waste into energy more efficiently – we’re working on deploying a pilot site for a regional beer brewery next year and then the next steps will be scaling that solution for the food and drink industry.”
