UK's Top Startup Hubs

The UK’s Top Startup Hubs

farzana Haque 04 may 2023

You may have noticed that we released our Equity Investment Market Update for Q1 2023 last week, in which we found that last quarter, equity investment distribution actually improved on a regional level.  Consequently, the Capital’s share of deals decreased by 10% from 2022. While there could be a multitude of reasons for this, such as foreign investors pulling back, it inspired us to look beyond the Capital to the other thriving startup hubs that exist across the UK.  

In this article, we’ve explored the top five regions for startups outside of London by the number of active high-growth companies in the respective local authority. For this ranking, we have understood active companies as ones that are in the seed, venture, growth established or zombie stages

Top UK cities for startups and scaleups



Number of active high-growth companies: 702
Total private companies: 112,851 

The best city for startups in the UK, outside of London, is the Scottish capital, Edinburgh. The medieval city is now home to 702 high-growth companies, employing an estimated 29k people. 

Artificial Intelligence, fintech and digital security are all popular sectors in the city, with a combined 12.3% (84) of all Edinburgh-based companies falling within these sectors. By contrast, only 17 companies operate in the energy sector (2.4%), making it the city’s least active industry. 

In Edinburgh, 20.6% of high-growth businesses with known founder genders are female-founded, slightly higher than the national average of 17.7%.  

Investment trends in Edinburgh

Since the beginning of 2013, there have been 815 announced equity rounds held by Edinburgh-based companies, raising a combined £1.48b. Having participated in 131 of these fundraisings, the most active fund in Edinburgh companies is the Scottish Co-Investment Fund, managed by Scottish Enterprise. 

Despite equity investment dropping nationally in 2022, Edinburgh saw an uptake in the amount of money invested into the city from 2021. Though in line with the national trend, deal volume did decrease in 2022.  

Securing £177m across five rounds, GoFibre—a startup providing full fibre and wireless broadband in rural areas—is currently the most funded active company in Edinburgh. Other Edinburgh-based companies that have secured significant VC investment include online games developer Build A Rocket Boy (£144m across four rounds) and vertical farming company Intelligence Growth Solutions (£66.3m across 13 rounds). 



Number of active high-growth companies: 668
Total private companies: 157,928

Leeds, the second most popular city for high-growth companies in the UK, boasts an impressive 668 businesses that collectively employ 73k individuals. We found that the city’s high-growth companies generated an impressive £10.5b in turnover according to the latest financials. 

Among the popular sectors in this Yorkshire city are marketing services, which constitute 7.3% of the area’s high-growth companies, SaaS, which accounts for 10.2% of startups in the city, and manufacturing and engineering, which make up 6.4% of high-growth businesses. 

However, when it comes to gender equality among founders, Leeds lags behind both Edinburgh and the national average, with only 16.6% of high-growth company founders being female.

Investment trends in Leeds

Over the last decade, there have been 223 announced equity rounds raising a combined £923m in Leeds. Much like Edinburgh (and the rest of the country), deal volumes fell in 2022 from 2021, but in contrast, the amount of equity invested actually increased by 136%. 

CloudSense, a SaaS startup that develops software for the automation and management of sales processes, is Leeds’ best-funded active high-growth company. It has received £87.1m in equity funding across five rounds. Other well-funded companies in the city include AMO Pharma, Maria Mallaband Care Group, Parklane Properties and The Meatless Farm Company



Number of active high-growth companies: 658
Total private companies: 170,741

With 658 active high-growth companies, employing a workforce of over 40k, Manchester is third on our ranking—but not by much. Over half the city’s companies (57.6%) are in the seed and venture stages, indicating a blooming startup ecosystem. Despite this, the number of new companies founded in Manchester has been decreasing since 2017, falling from 59 new foundations in 2017 to just 8 in 2022. 

When it comes to gender equality, Manchester trails behind the national average with only 16.4% of companies in the city being female-founded. The business and professional services industry is the most common here with 56.4% of all high-growth companies operating within it. Within this industry, the most popular sectors are marketing services, analytics and tools and advertising agencies. 

Investment trends in Manchester

The city of Manchester has seen 459 announced equity deals since Q1 2013, which have raised a combined £3.03b. It’s worth noting that the spike in equity raised in 2019 is attributed to two rounds worth £1.13b, raised by the now-insolvent Greensill

The most active investors in Mancunian companies by deal volume include Praeture Ventures (contributing to 24 fundraisings), NPIF Equity Finance (with 23 fundraisings) and GC Angels (with 19 fundraisings). Raising £118m across three rounds, Iduna—a cleantech that develops sustainable infrastructure—is the most-funded, currently active Manchester-based company. Other big raisers in the city include Peak, creator of AI-based software used to improve business efficiencies and decision-making, Sorted, a developer of software for carriers and retailers for the delivery process, and Evolution Money, a loan provider for homeowners. 



Number of active high-growth companies: 586
Total private companies: 292,735

Birmingham ranks fourth on this list with 586 active high-growth businesses calling it home. In the latest financials, the city’s companies turned over a total of £5.63b, with an average turnover of £40.8m per company. Startups and scaleups in the city have an average of 71 employees per business, higher than Edinburgh, Manchester and Bristol at 41, 62, and 69 respectively but less than Leed’s average of 110. There has been a consistent upward trend in active companies, with a total increase of 270 companies over the past decade. 

When it comes to gender equality, Birmingham fares a little better than the national average with female-founded companies making up 18.1% of the high-growth startup ecosystem, in comparison to the national average of 17.7%. 

Investment trends in Birmingham

Since the start of 2013, the city has raked in £420m in equity investment across 183 rounds. Investment levels have remained fairly stable over the past decade with a spike in 2017 and a slight drop in 2022. With the help of a huge equity round to the tune of £60.0m held by Joblogic, the city is set to break its record of equity investment raised this year. 

Other big raisers in the city include Market Location (£42.0m across one round), Aqupak (£39.4m across four rounds), and CrowdPropoerty (£20.5m across seven rounds).

The top funders in the city are Mercia Fund Managers, Midlands Engine Investment Fund (MEIF): Equity Finance (West Midlands) and Midlands Engine Investment Fund (MEIF): Proof of Concept having participated in 13 fundraising rounds each.



Number of active high-growth companies: 580
Total private companies: 100,222

Bristol, located in the South West of England, has secured the fifth spot on our list with a notable 580 high-growth companies calling it home. Impressively, the latest financial figures reveal that Bristol’s high-growth companies generated a total turnover of £8.28b, averaging £85.4m per company, and boasting an average workforce of 69 employees per company.

Bristol’s female-founded high-growth companies constitute 17.8%, narrowly surpassing the national average. The city has experienced steady growth in active companies since 2013, with 313 additional companies becoming operational over the last decade, although the growth rate has somewhat flattened out in the past two years.

Investment trends in Bristol

Despite being home to fewer high-growth companies, Bristol has closed more equity rounds and raised more equity investments than Birmingham. With 310 equity rounds since the start of 2013, Bristol-based startups have raised a total of £2.14b. 

The top funded active company in the city is the University of Bristol spinout, Graphcore, which has raised £528m across nine rounds since 2016 date. Other well-funded companies include fintech, ClearBank (£348m across six rounds), OVO Group (£259m across four rounds) and Immersive Labs (£151m across six rounds). 

The city’s top funders by number of fundraisings participated in are Seedrs (37), Bristol Private Equity Club (27) and Crowcube (16). 

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