How the Leeds tech sector attracted $43.5m in venture capital investment in 2020

Tech startups in Leeds attracted more venture capital investment in 2020 than they did the previous year, as the pandemic made it easier for them to get the attention of funders.

Stuart Clarke, a director of Leeds Digital Festival, says Leeds' tech sector is showing resilience.

Leeds was one of four cities that attracted more venture capital investment, according to data from job search engine Adzuna and industry network Tech Nation.

Investment levels jumped 29 per cent from $33.6m to $43.5m, the report put together for the Department for Digital, Culture, Media and Sport’s Digital Economy Council showed.

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Stuart Clarke, a director of Leeds Digital Festival, told The Yorkshire Post that this was a sign of the region’s resilience.

He said: “Regardless of the difficult year that we have had around the world it shows the resilience of the tech sector. We’ve seen not only high profile success stories such as Zoom but there are so many firms that I know of in the Leeds city region from the tech world that have had their best year ever because they are providing the products and services that people want.”

Tech firms that operate in the business to business space have largely been shielded from the headwinds buffeting the economy.

A lot of these firms offer products and services that have grown in importance as companies switch more and more to online working.

“Tech has provided a lot of the solutions to the problems that 2020 gave us,” Mr Clarke said.

Venture capital investment as a whole across the UK was down from $14.8bn in 2019 to $14bn in 2020.

However, the UK tech sector continued to outperform all of its European neighbours when it comes to attracting venture capital investment.

Fintech was the most popular sub-sector of tech to attract funding, accounting for 32 per cent of venture capital investment into the sector overall across the UK, according to the report.

It also showed that of the 3,579 jobs advertised in Leeds during the month of November, 969 were in tech and IT.

The average advertised tech sector salary in Leeds was £50,447, compared to £39,210 for non digital roles.

Mr Clarke said: “Year-on-year for the last six or seven years we’ve seen real growth in the tech sector in the Leeds city region. That’s down to a couple of things.

“We’re keeping more talent within the region. We’re not losing firms and students to other areas, particularly London. You can start or join a tech firm within the city region now.”

Jobs grow in technology sector

According to the data, 10 per cent of all UK job vacancies are now in tech.

Overall, UK tech employment has increased by 11 per cent in two years to almost three million and more than a third, 37 per cent, of those employed in the digital tech sector are in non-tech roles including legal, marketing, HR and administration.

Tech job vacancies are now at the highest point since May. There were 106,000 IT-related vacancies in March, falling to a low point of 50,367 in July.

However, vacancy rates began increasing again in July last year.

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James Mitchinson