Mapping the herd: the UK's unicorn companies in numbers. Download the full report

How Leeds is Nurturing its Startup & Scaleup Companies

| Lucy Wilson

Category: Uncategorized

Long seen as the financial capital of the North, Leeds is the focal point for enterprise in the West Yorkshire region. Several big names can be found headquartered in the city, including Asda, First Direct, and Sky Bet, alongside a strong roster of emerging startups and innovative scaleup companies. And with the recent launch of Northern Gritstone, set up by the universities of Manchester, Leeds, and Sheffield to boost commercialisation of spinouts in the region, the city’s success looks set to continue. With that in mind, we explore what makes Leeds a good place for ambitious businesses to set up shop in 2021.

The high-growth landscape in Leeds

Leeds has the third-largest population of high-growth companies in the United Kingdom, outside of London, with 507 ambitious businesses currently operating in the city—ahead of both Bristol and Glasgow. These companies represent 26% of the total high-growth population in Yorkshire and The Humber, making it by far the top startup hub in the region—next in line is Sheffield (South Yorkshire), with just 11%. 

On top of this, 148 of the high-growth businesses in Leeds have been classed as scaleups, meaning they’ve grown at least 10% in turnover or headcount, over three years. This makes Leeds the UK’s number one location for scaleups, outside of the Capital, proving that Manchester’s not the only big player in the Northern Powerhouse.

Stages of evolution

The high-growth ecosystem in Leeds has reached a similar level of maturity as the UK’s wider population, with 15% of companies in the city currently at Growth stage, versus the national average of 12%, and 24% at Established stage, versus 28%. Meanwhile, 12% of Leeds-based businesses are currently operating at Venture stage, compared to 17% across the UK. 

As with the general population, Seed-stage businesses are by far the most common in Leeds (38%), whilst Exited businesses are the least (12%). It’s worth noting, however, that ambitious companies in Leeds are 30% more likely to have exited the private market—either through an acquisition or an IPO—than the general high-growth population.

Startup industries

Leeds has a very strong focus on Business and Professional Services, its most popular sector, with almost half (48%) of all its high-growth companies operating in this space—slightly higher than the UK average of 43%. Whereas, Technology and IP-based businesses make up just 27%, compared to 35% across the country, and considerably lower than in Manchester (41%) or Edinburgh (45%). 

Next is the Industrials sector, at 24% of companies, including the city’s 121 high-growth manufacturing and engineering businesses, and its two biggest raisers to date: building materials firm Encon Insulation (one equity round, worth £54m) and plant-based food producer The Meatless Farm Company (six equity rounds, totalling £32m). Other well-populated industries in Leeds are Retail (10%), e-commerce in particular, and Leisure and Entertainment (10%), in keeping with trends seen across the country. 


Private equity and venture capital firms are by far the most active investor type in Leeds. They’re responsible for a massive 53% of the announced equity deals made since 2011, followed by Corporates (9%) and Banks (8%). It’s unsurprising, therefore, that the city’s top investor is private equity and venture capital firm Mercia Asset Management

Mercia have so far backed 18 equity fundraisings into high-growth startups in Leeds, primarily through their NPIF Equity Finance fund. The NPIF, or Northern Powerhouse Investment Fund, is a government scheme providing over £500m of investment to support small businesses and regional entrepreneurship in the North of England. Backed by the European Regional Development Fund, NPIF is a collaboration between the British Business Bank and 10 LEPs in the North West, Yorkshire and The Humber, and Tees Valley.  

Meanwhile, having recently been named the most active regional VC fund in the UK, BGF (formerly Business Growth Fund) is also very active in Leeds. Since 2011, BGF has participated in 15 equity funding rounds into high-growth companies in the city. Next up are Crowdcube and Finance Yorkshire, both with 13 announced equity deals to their names. 

Other notable investors in Leeds include commercialisation company IP Group (including their North East Technology Fund) and the Future Fund co-investment scheme, each with five deals. Managed by British Business Bank, the Future Fund was set up by the Government to support UK companies facing financial difficulties due to COVID-19—it’s now closed to new applicants.

Northern hub for professional services

Leeds is often described as the UK’s second banking centre. And true to its name, the city is one of the top local authorities for Banking and Financial Services, outside of London, with 21 high-growth companies currently operating in the sector. And beyond banking and finance, Leeds is also home to 10 law firms, 44 marketing companies, and 28 recruitment or outsourcing agencies that are either fast-growing or creating ambitious growth plans. 

Amongst the top-funded Business and Professional Services companies currently active in Leeds is Reward Finance which provides alternative loan funding to SMEs. Then there’s Plexus Law, payment processing platform Eris FX, marketing company Force24, and Crisp which provides social media moderation and digital risk monitoring services, and has raised an impressive £21.3m in equity investment. Meanwhile, Hanzo has secured seven rounds of equity funding for its data management software, aimed at legal and compliance teams, whilst business intelligence and predictive analytics firm Panintelligence has been named on the Northern Tech 100 list of companies three times in the past five years. 

With such a strong financial services industry existing in the city, many believe Leeds is also poised to become the UK’s next new fintech hub. Of the 14 high-growth fintechs based in Yorkshire and The Humber, six are currently headquartered in Leeds—and 12 in total in the Leeds City Region LEP. The city is also home to FinTech North, designed to bring together the region’s fintech community—its collaborative platform is used to share ideas, challenges, and best practices in the sector, and showcase innovative fintech startups in the North. 

Still a rather nascent ecosystem, the fintech sector in Leeds has already produced a number of successful ventures like Eris FX, operating since 2006, as well as several exciting startups still in the early stages of their growth journeys. PrinSIX, for instance, has developed a conversational onboarding platform for credit providers, to personalise and improve the customer lending journey. Only founded in November 2019, it’s already secured £420k in equity funding.

Meanwhile, founded in 2018, fellow fintech Tappit has developed a cashless payment and data system for live events, such as sports matches and festivals. Through its mobile app, digital wristbands, and real-time data analysis, Tappit is aiming to simultaneously improve profits and the fan experience. Since launching, the company has already raised more than £8m in investment, including two rounds of equity funding, totalling £339k.

What makes Leeds a good place for startups and scaleups?

In 2019, research showed that the cost of starting a business in Leeds City Region LEP was 80% lower than London. This is just one of many ways in which the startup ecosystem in Leeds continues to attract, retain, and nurture some of the UK’s most innovative companies. Alongside its relative affordability, Leeds is home to a flourishing tech community, celebrated each year through the Leeds Digital Festival. There’s even a dedicated platform for tech companies based in the city, with ecosystem news, local events, jobs boards, and workspace listings. But what else makes Leeds such a great place for ambitious businesses? 

Equity finance

Since 2011, ambitious Leeds-based companies have secured 162 announced equity fundraisings, plus an additional 290 deals that were unannounced. The announced deals raised by businesses in Leeds amount to £521m in total, with an average round size of £3.89m, and median round size of £500k. And these investments saw participation from 92 different funds. 

With 48 active funds operating in Yorkshire and The Humber, 31 of which have offices in Leeds itself, the city benefits from access to locally-minded investors and growth capital. Meanwhile, a 2019 report from EY showed that Leeds is also one of the leading locations for foreign investment in the UK. It’s no surprise, therefore, that more than a third of ambitious businesses in Leeds have been backed by equity funding. 


Of the high-growth companies currently active in Leeds, 163 have attended an accelerator—a scheme that supports companies or founders through a structured learning programme, often alongside mentoring and equity investment. A much larger proportion (32%) of Leeds-based startups have attended one of these programmes than in the general high-growth population (22%). 

Ambitious companies in Leeds have been supported by a total of 27 accelerators to date, including one based in Yorkshire itself, Y Accelerator, which was designed to create jobs across the Sheffield City Region. But the vast majority (85%) of accelerator attendances by Leeds startups are down to NatWest’s Entrepreneur Accelerator (formerly Entrepreneurial Spark) which has regional hubs throughout the UK, including Leeds. The programme is responsible for an impressive 254 out of 299 attendances, and recent graduates include edtech Synap, blockchain software development startup CurveBlock, and big data healthcare company Nine Health Global.

Other accelerators actively nurturing the city’s early-stage ecosystem include PwC Scale Programmes, which has so far been attended 13 times by companies based in Leeds. PwC Scale Programmes offers its cohorts a series of masterclasses to help them scale their businesses, plus access to a pipeline of new customers and new channels to market. Its 10-week programmes cover a range of sectors and technologies, such as LegalTech, Cyber, and PropTech. Meanwhile, Leeds is also home to a Barclays Eagle Labs hub which has partnered with co-working space Avenue HQ (Leeds city centre) to provide office space, events, and mentoring to ambitious entrepreneurs in the city


Leeds is home to several universities, including leading public research institutions the University of Leeds and Leeds Beckett University. So, on top of support from investors and accelerators, high-growth companies in Leeds benefit from a very strong talent pool, with the city producing and retaining a high level of university graduates each year. 

In fact, the University of Leeds is doing a particularly good job of supporting the city’s startup and scaleup community. As well as spinning out 25 high-growth UK companies of its own, the University launched its £40m Nexus innovation centre in 2019. Nexus has been designed as a hub for Leeds’ growing startup community, encouraging collaboration between businesses and with the University, providing access to its research, talent, and facilities. That same year, the University also opened its new Centre for Financial Technology and Innovation (CFTI), to support the development and application of new fintech in the UK.

Discover the UK's most innovative companies.

Get access to unrivalled data on all the businesses you need to know about, so you can approach the right leads, at the right time.

Book a 40 minute demo to see all the key features of the Beauhurst platform, plus the depth and breadth of data available.

An associate will work with you to build a sophisticated search, returning a dynamic list of organisations matching your ideal client.