Tech Nation reveals ideal scale ratio for regional tech hubs

Tech Nation says that a 50:30:20 ratio of seed, 50 per cent, early growth, 30 per cent, late growth, 20 per cent, companies in a UK regional tech hub is indicative of a mature, balanced ecosystem, that is well placed to benefit from the accelerated growth of late stage companies while creating the next wave of tech scaleups.

Tech Nation's Scale Ratio suggests the 50:30:20 ratio results in the highest performing hubs - areas with the largest number of scaleups attracting the most significant venture capital investment.

Overall, Yorkshire exhibits a ratio of 45:28:27 - with a marginally lower proportion of companies at seed stage compared to the larger tech cities. Leeds and Sheffield exhibit a slightly lower proportion of early-stage and seed stage companies than the ideal ratio.

London, Manchester and Cambridge generally exhibit the 50:30:20 ratio and attracted the most investment in the UK in 2020, with 70 per cent of investments made into late stage companies.

Dr. George Windsor, head of insights at Tech Nation, said: “Crucially, the Scale Ratio tells us about the growth potential of the UK’s tech hubs and provides the levelling up agenda with new evidence to boost regional ecosystem development.

"It highlights exactly where scaleups are not receiving the support they need to grow from seed stage upwards to ensure these gaps are plugged.

"Despite the challenges of the past 12 months, the growth and potential of homegrown tech pioneers gives us something to celebrate.

“Tech scaleups hold the key to the UK’s competitiveness in the next decade through job creation and investment.

"Scaleups are already driving investment into UK tech, representing 81 per cent of the UK total and creating employment, with approximately 150,000 jobs in 2019.

"From established firms to startups, it’s important to remember that companies at all stages make up the local and regional economies that give UK tech its global reputation.”

Tech Nation also revealed the latest cohort of its Upscale programme, 33 of the fastest-growing and most promising home-grown tech businesses in the UK.

The Upscale programme supports the growth of leading scaleups, exploring the fundamental growth challenges between peers and established tech founders.

One of the 33 companies joining the programme is from Yorkshire - Leeds-based AI marketing platform Bidnamic.

Liam Ward, Upscale Programme lead at Tech Nation, said: “We’re incredibly excited to launch Upscale 6.0, our most regionally diverse cohort ever, alongside the Scale Ratio Report, and to continue to champion and support the UK’s most exciting fast-growth companies.

"Despite the events of the last 12 months, we’re still seeing some exceptional companies scaling at Series A stage, with healthtech and the future of work being represented particularly strongly.

"We’re excited to adapt Upscale to support the new challenges that founders are facing around remote work, fundraising and culture; and to work with such an exciting group of leaders.”

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James Mitchinson