The tenth in a series of thought leadership reports, Barclays Eagle Labs’ Tech in the UK 2023 – Innovation Nation, published in partnership with Beauhurst and funded by the Government, provides a detailed view of the growth trends and opportunities within the UK tech sector. To do this, they surveyed 2,500 individuals in the sector, and looked at measures like access to capital, talent, facilities, and international markets.
The report highlights several key tech hubs in the UK – and that includes Leeds. To get a better picture of what’s going on in the Leeds City Region specifically, Beauhurst have compiled some insights into tech growth in the region, providing a breakdown of investment trends and an overview of the support in place to keep the Leeds tech ecosystem thriving.
Between 2019 and 2023, Leeds has experienced notable growth in investment within its tech sector. The city’s tech ecosystem has steadily developed, and is supported by various accelerator programmes and government initiatives. These include varied supporting offerings from Barclays Eagle Labs, as well as the Help to Grow programme, offered by Leeds University Business School, which provides participants with access to a co-working space in Leeds, and Spark, a business startup service offered by the University of Leeds.
Investment plays a crucial role in the growth and development of the tech sector, providing the necessary capital for startups and established companies to innovate and expand.
In Leeds…
Optalysys secured the largest fundraising event in the last five years with a single £21.0m deal in July 2023—a round which accounted for 30.2% of the total investment for that year within the region. Originating from the University of Cambridge but with their HQ in Leeds, they develop optical processors, with applications in big data and supercomputing. Since its incorporation in 2013, they’ve raised a total of £31.2m in equity funding and £1.34m in grants.
It was Mercia Asset Management who emerged as the most active investor in Leeds’ tech sector, participating in 26 deals between 2019 and 2023. The investment firm is known for its support of SMEs outside of London and the South-East.
Another prominent investor in tech businesses based in Leeds is Northern Gritstone, which actively invests in companies based in the North, particularly those operating within the deeptech and life sciences sectors. They were established to support the commercialisation of science and IP-rich businesses, and to fund similar businesses across the region.
Accelerator programmes are designed to help startups and early-stage companies rapidly grow and scale their operations. These programmes typically offer a combination of mentorship, office space, funding, and networking opportunities, often ending in a demo day where participants present their progress to potential investors.
Entrepreneur Accelerator came in as the top accelerator in Leeds based on tech company attendance, with 20 participations between 2019 and 2023. Rated the top UK Accelerator by size and growth by Beauhurst, the programme helps businesses with everything from building an effective team to accessing growth funding and developing a scalable infrastructure.
It’s not just accelerator programmes that contribute to the Leeds tech ecosystem – the local government also plays a crucial role in supporting the growth and development of tech companies in the region. Initiatives like AD:VENTURE exemplify this support, offering funded assistance for businesses in their first three years of operation. This programme encompasses comprehensive business advice, as well as financial aid, addressing critical early-stage challenges.
The local government-led Business and IP Centre Leeds also provides invaluable resources, including guidance on intellectual property issues like patents, trademarks, and copyrights, alongside market research services. These support networks are instrumental in bolstering the tech ecosystem within the city, facilitating the development of a robust network of high-growth companies and enhancing their capacity for innovation and expansion.
Despite its successes, Leeds’ tech ecosystem continues to face various challenges. Access to funding, especially in the early stages, remains a significant hurdle for many startups. Additionally, attracting and retaining top talent is a persistent issue across the UK tech sector, as the demand for skilled professionals often surpasses the supply. Initiatives such as the Barclays Eagle Labs Ecosystem Partnership programme, are actively empowering local organisations to disrupt this trend.
These challenges also present opportunities. Leeds’ growing recognition as a tech hub continues to attract an increasing number of investors and talented professionals to the city. Furthermore, initiatives like the Northern Powerhouse, which aims to boost economic growth in the North through better transport, education and business development, are likely to enhance the city’s appeal.
It’s clear that both investment and support for the tech sector are on the rise in Leeds, and while it may have its challenges, the city remains one of the most prominent tech hubs outside of the capital. Read the full Barclays Eagle Labs report Tech In the UK 2023 – Innovation Nation for more insights and regional analysis.