Levelling Up Power Tech League 2021
Cambridge
Manchester
Oxford
Edinburgh
Bristol
Leeds
Birmingham
Newcastle
Cardiff
Belfast
High-growth tech companies make Cambridge their home
The analysis - by Dealroom and the job search engine Adzuna - showed the city’s position as a leading biotechnology and semiconductor research hub. Cambridge is now home to six unicorns - high growth companies worth over $1 billion in valuation - and eight futurecorns that are predicted to reach this level in the next few years. The fast-growing tech companies in the city raised a collective £605 million this year in 49 funding rounds, with leading rounds from Centessa Pharmaceuticals (£189m), cell coding company Bit Bio (£78m) and semiconductor manufacturer PragmatIC (£60m).
There are over 2,000 tech jobs available in Cambridge, an increase of 241% since last years figures, many of which come with some of the highest average advertised salaries in the country. Skilled tech staff typically earn around £56,156, up 11.3% since last year.
With more money than ever flowing into UK tech - £26 billion this year, up 2.3x from last year’s figures of £11.5 billion - regional cities are taking a bigger slice of the pie. Around £9 billion of all total funding went to startups and scaleups outside London, indicating that world-class tech companies are being built across the UK every day.
UK tech captured more than a third of investment into Europe
The £26bn raised by UK startups and scale-ups was nearly double the figure raised in Germany (£13.5 million) and is more than three times that raised by France companies (£8.6 billion). UK tech investment made up 35% of the total £76 billion that flowed into the European tech ecosystem this year.
UK venture capital firms have also had a record year and raised £7 billion with record-breaking rounds from London firms including Index Ventures, Balderton Capital, 83North and Eight Road Ventures.
More US investment
The majority of the money coming into UK tech is from the US, with 38.2% of all funding coming from the States, up from 31.5% last year, with the majority of it going into fintech and health tech companies. Over 28% of UK venture funding came from domestic capital. Competition for deals among VC funds is heating up as more US venture funds launch offices in the UK, including General Catalyst, Lightspeed Venture Partners and Sequoia.
More unicorns created than ever before + more than France and Germany combined
More funding means more unicorns, with 29 created this year including the e-commerce platform Depop, payments platform GoCardless, car selling platform Motorway, insurance disrupter Marshmallow, and the challenger bank Starling Bank. This takes the UK's total unicorn figure to 116 meaning 25% of the UK’s total unicorns were created in 2021 alone. The UK has more unicorns than France (31) and Germany (56) combined.
30% of new unicorns created this year are outside of London
Nine out of the 29 unicorns created this year are outside London including Interactive Investor in Glasgow, Vertical Aerospace in Bristol and Touchlight Genetics in Hampton. Of all the unicorns created in the UK, 35% are outside London and 35% of futurecorns are also based outside of the capital.
More job opportunities in London and outside
The increased levels of money going into UK tech also mean companies are in need of trained technical and business staff. There has been a 50% rise in overall UK tech job vacancies advertised this year compared to 2020’s figures, with advertised tech vacancies hitting 160,887 in November. Currently, tech vacancies make up 12% of all available jobs in the UK, with just over 50% of these jobs available outside of London and the South East.
Software developers are still the most in-demand tech job across the UK. These positions make up 9% of all tech jobs with prospective developers being offered an average salary of £64,318, a 12% increase on 2020’s figures. Specialist staff such as java developers and IT systems architects continue to be able to command high salaries with the average advertised wage for these roles being £80,076 and £93,004 respectively.
Remote jobs spread tech success
The UK tech industry continues to lead the way when it comes to hiring practices since technical jobs are well positioned to be carried out remotely. In fact, 21.6% of all job ads in the IT sector are advertised as remote roles. This is also contributing to the spread of the UK tech ecosystem beyond London as businesses can hire across the country and find the staff that they need, regardless of location.
Increase in R&D
The government has increased its investment in R&D this year to £20bn by 2024-25, in order to support the UK’s research institutions, universities and businesses with an aim to increase this to £22bn by 2026-27. This investment is aimed at securing the UK’s future as a global science superpower, supporting businesses as they transition to becoming more innovative and productive and creating highly skilled jobs across the country. At the same time, there has been increased private investment in deep tech firms, totalling £6.2bn in 2021, up from £2.8bn in 2020. One of the biggest deep tech deals of the year was the £396m Series D raise by AI drug discovery company Exscientia, of Oxford, which helped the company achieve unicorn status.
Digital Minister Chris Philp said: "It's been another record-breaking year for UK tech with innovative British startups helping solve some of the world's biggest challenges.
"Capitalising on this fantastic investment across the country is a crucial part of our mission to level up, so we are supporting businesses with pro-innovation policies and helping people to get the skills they need to thrive in this dynamic industry."
Saul Klein, partner and co-founder at LocalGlobe, said: “It’s taken 20 years for UK tech to get to the starting line and things start to get interesting in the next 20 years. We have all the ingredients to become the leading tech ecosystem in the world, with record levels of R&D, financing and established tech hubs across the country from New Palo Alto in Kings Cross, to Cambridge, Edinburgh and Manchester. But the key differentiator for investors in future will be a willingness to take an ethical approach to building businesses. We can be world-class in this and over the long term this will set our companies apart from those built in the US and China.”
Yoram Wijngaarde, founder and CEO at Dealroom, said: “The UK tech ecosystem has exploded in the past year, with an increasing number of mega rounds minting new unicorns and futurecorns every day. This is significant because we know from research that employees at $1b+ companies often go on to found their own startups, some of which become unicorns themselves, which helps to shore up the ecosystem and lead to a new generation of global companies.”
Andrew Hunter, co-founder at Adzuna, said: “The growth of tech companies across the UK has led to a surge in hiring across the country. The number of IT job openings is higher than its ever been and is consistently growing week on week. In particular, it’s great to see strong hiring in cities like Manchester and Birmingham which are showcasing some of the highest figures outside of London. The struggle for businesses across the country is having enough skilled staff to fill these positions to allow them to keep growing.”
About DEC
The Digital Economy Council is a non-statutory advisory committee of independent members set up to provide advice to the government. Its purpose is to harness the expertise of industry and the wider tech community to develop a world-leading digital economy that works for everyone.
Methodology
To create the Levelling Up Power Tech League, researchers gathered data for each city on venture capital (VC) funding, the number of VC rounds, the number of available jobs, the average salary, the number of Unicorns and the number of Futurecorns for each of the regions. For each category, they ranked each region from one to 10. The sum of the rankings for each category within each region was calculated, and the region with the lowest overall ranking was the winner.