'Extraordinary momentum': Sheffield becoming leading home to 'deep tech' firms
Sheffield is the leading regional city for new ‘deep tech’ firms, a new report from the Royal Academy of Engineering.
‘Deep tech’ is a description for companies built around new scientific and engineering innovations and breakthroughs.
A total of 25 such venture-capital backed companies have been founded in Sheffield since 2020; taking its national share of new deep tech companies from one per cent to three per cent.
The formation of 25 new VC-backed companies is a 212 per cent increase on the numbers formed between 2010 and 2019.
It places the city fourth nationally; behind only the ‘Golden Triangle’ locations of London, Cambridge and Oxford.
London has the highest of new firms at 375, with Cambridge on 84 and Oxford 55. But there are a further 165 new deep tech businesses formed in the rest of the UK outside of major cities.
Leeds has slightly increased its share of new deep tech companies from 1 per cent to 1.2 per cent, with 10 new businesses formed since 2020.
Details have been revealed in the Royal Academy of Engineering’s State of UK Deep Tech 2026 report, which provides a definitive overview of the UK deep tech landscape, tracking investment, emerging opportunities, and the UK's competitive position globally.
Since the start of 2026, investment has already reached £9.6 billion and deep tech now accounts for 54 per cent of all UK venture capital investment, up from 30 per cent in 2025.
The UK’s 2,600 privately held deep tech companies are collectively valued at £155 billion, more than five times their 2020 value.
Kanishka Narayan MP, UK Minister for Artificial Intelligence, said: “Britain is already a great deep tech nation, with world-leading strengths in AI, quantum, life sciences and other technologies that will define our future.
“This report from the Royal Academy of Engineering clearly shows the extraordinary momentum behind AI in the UK, as it reshapes the deep tech landscape. Billions of pounds of investment are flowing into businesses developing and applying this transformative technology in a wide variety of ways.
“By combining AI with Britain’s strengths in science and engineering, from drug and materials discovery to robotics and autonomous systems, we can build new industries, grow globally competitive companies and ensure AI delivers prosperity across the UK.”
Ana Avaliani, Director of Enterprise and Place at the Royal Academy of Engineering, said: “Deep tech is no longer simply an economic opportunity; it has become a strategic national capability. Capital is essential, but it is not enough. The UK must also provide access to specialist talent, infrastructure, procurement pathways, regulatory clarity and commercialisation support so that breakthrough technologies can scale, compete globally and remain anchored here.
“This report shows that world-class innovation is emerging across the UK. Through our Enterprise Hubs, we are working to close that gap and remove friction in the innovation ecosystem, connecting founders with the capital, networks and expertise they need to turn exceptional research and engineering into globally competitive companies.
“If the UK can unlock the full strength of its deep tech ecosystems, it can build an even stronger pipeline of successful businesses and capture more of the economic and strategic value they create.”