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Director of Data and Research, Tech Nation

Dr. George Windsor

The last decade of UK tech has been explosive; growth has been unprecedented, and the positive economic impact created by founders has been almost unimaginable.

To make even greater strides, as UK tech continues to mature we must take every opportunity we can to collectively re-imagine, and change ecosystem conditions for the better.

Scaleups in the UK have returned just under $600bn in value over the last ten years - achieved by an exit of some form, whether an acquisition, SPAC or a public listing. A huge success - seeing a once embryonic ecosystem truly deliver economic value across the UK. However, now an expectation is set. Over the next decade, to return around the same rate of value to the ecosystem (just under 3.7x investment) UK tech firms will need to target exits worth $2tn.

There are tailwinds, and the inevitable headwinds in realising continued high growth. Investors have started to pull back over the last six months, a slowdown both reflective of broader economic trends, and in part contributing to them. Investment in 2022 receded by 32% globally, whereas it dropped by 28% in the UK, faring well compared to other large tech economies, like China and US (-45%, and -36% respectively).

There has, however, been a reduction in the rate of unicorn creation ($1bn+ valuation companies) which is not a positive trend for the realisation of ever swelling value.

But, future unicorn ($250m-$800m valued companies) numbers have risen, with 45% growth from 2021 to 2022 - suggesting one of a number of phenomena. The two theories of most interest are that the UK is effective at supporting companies to scale, but not to the high end of the value spectrum, or that there is a glut of unicorns to come, on the basis of many companies being well poised to gain value and breach the billion dollar mark.

These macro trends are undoubtedly important, and can point to the influence of system level conditions for growth. However, they are unlikely to resonate in the same way with a national policy maker as they are with a tech leader - managing the operations and tech functions of a fast growing twenty person startup, for example.

The UK tech ecosystem is currently valued at just over $1tn, and, based on projections, will be worth $2.6tn if the momentum gathered over the last decade is maintained for the next. But, if better conditions for scaling can be created, the opportunity is potentially much greater than an uplift of $1.4tn in ecosystem value. The UK tech ecosystem is at an inflection point - either the bubble risks being burst, or future growth can be promoted, and augmented. Alongside target $2tn for exits, all ecosystem stakeholders must collectively aim for $4tn ecosystem value by 2032. This report outlines some of the mechanisms for getting there.

In this report, the final Tech Nation Report, seeks to explore:

  • the conditions for growth created over the last decade, 
  • what tech companies can do to react to these conditions, and 
  • what needs to change in order to support UK tech companies to accelerate their growth in future.

We aim to provide resources for an evolving ecosystem; for policymakers, for corporates, and for startups and scaleups, to help both imagine and catalyse change to create the Tech Nation we wish to be, which starts with the action we take now.

Case study

How to build a scaleup

Avin Rabheru MBE, Founder and CEO

Housekeep (HQ in London)

Housekeep is the UK's leading home services platform, connecting customers with vetted and highly-rated local cleaners & tradespeople.

What factors contribute to the success of scaleups in the UK?

You've got to start with talent; in the early days this will be business needs generalists who love the mission, then as you grow you need specialists who can bring expertise and wisdom to the table.

Beyond that, we need to create an environment for startups in the UK where potential can be explored quickly - this means stable economic conditions, minimal red tape, access to capital and good international trading partnerships.  

What are the key challenges for scaleups in the UK and how should they be tackled?

The biggest challenge startups in the UK have faced in recent years is undoubtedly economic uncertainty. We've fallen behind international peers since the financial crisis, and Brexit, Covid and recent economic challenges have compounded the problem.

As founders, what we really want are stable, certain economic conditions. In that context, we then also need the freedom to build big businesses.

Click to read more


Key findings



Fragomen has always been proud of its status as a trusted partner of Tech Nation. The tremendous work it has consistently done since 2014 to support, nurture and promote the UK tech ecosystem is unparalleled. It is therefore a very great privilege for Fragomen to be the co-headline sponsor of the Tech Nation Report 2023.

Tech Nation reports have achieved iconic status as honest almanacks of the journey taken by UK tech. This year’s report is no exception. 

But this year’s report is particularly special. In addition to providing an objective account of the journey taken by UK tech, not least with the benefit of Tech Nation visas in the last year, it also, in the year Tech Nation’s own journey has been cut short, offers generous and wise counsel of what is required to enable the UK tech ecosystem to maintain its strength on the global stage, meet its full potential and so continue the tremendous progress it has made in the last decade into the next. In short it sets the standards to which those taking forward the stewardship of UK tech should be held to account.

Twelve years ago, in a meeting at the British Consulate in New York, we were fortunate to be introduced to Tech City Investment Organisation and to the UK’s Tech City initiative – a grand vision to scale the UK digital economy from a nascent East London startup cluster to a global tech powerhouse.

We saw an opportunity to contribute again, as we have since in the early days of Silicon Valley:  an upstart Palo Alto law firm going against the grain by focusing on the high-growth Bay Area startups of the 1960’s and 1970’s – and the new “venture capitalists” backing them - culminating in partnering with Apple in 1980 on one of the largest IPOs the US had ever seen.

We were told that story was being written again in the UK - and was that ever the truth!  In London alone, venture investment increased from $100m in 2010 to $25bn in 2021 – firmly establishing London as the Silicon Valley of a Europe in the ascendancy and the UK as a global center of innovation, venture capital, and unicorns.

As a Silicon Valley law firm, it has been our privilege to come to the UK - along with dozens of top US VC funds and thousands of talented individuals from around the world – to help UK tech companies access the US commercial and capital markets, and compete and win on the transatlantic stage and globally.  Partnering with Tech City Investment Organisation – then Tech City UK and today Tech Nation – over the past 12 years was an obvious choice and one of the best decisions we made.


Data partners

Many thanks to our data partners, Dealroom, and TalentUp.



This report commences with an assessment of access to finance, seen by many as the lifeblood of startups and scaleups - vying only with people and talent in terms of criticality for growth.

Much of the data we are able to explore on access to finance enables us to dive deep into deals done, and flows of capital for one organisation to another. In this chapter, we endeavour to explore the key facets of the tech finance scene in the UK, and globally. We focus on VC investment, Alternative finance, Investors, and the Future conditions required for continued growth.


VC Investment


UK investment

UK startups raised $30.8bn in 2022. This is down from the heights of 2021 when funding peaked globally, however is still 72% higher than the 2020 total.

(Source: Tech Nation, Dealroom, 2023)

Following the 2020 dip in investment, 2021 was a year when investment into UK startups and scaleups rose to record heights. The most notable increase was seen in the $250m+ rounds which went from a total of $2.6bn to $14.2bn in the period, a 446% increase. The 31 investment rounds span transportation, telecommunications, fintech and healthtech, and helped create the year’s record number of unicorns being produced (38). 

Investment of this class was not sustained in 2022, but remained above pre-covid levels at $30.8bn. The largest decrease between the years 2021 and 2022 was by the $250m+ rounds which fell by 51% in value. Within these rounds of investment over $250m+, half went to fintech companies. This includes investments into well known leaders in the space, GoCardless and A huge $1.4bn was invested into FNZ, the fintech wealth management platform for financial advisors. The company is now valued at $20bn, making it the fourth most valuable British unicorn after WorldPay, Revolut and Xyratex. 

There could be more challenging times ahead. We are only just beginning to see the full impact of a slowing market in the second half of 2022. 

(Source: Tech Nation, Dealroom, 2023)

The UK showed a strong start to 2022 with the highest quarterly investment levels from 2018 being experienced in the first quarter of the year. A $2.7bn decline in the next quarter was followed by even more disheartening levels of investment in Q3 & Q4. Investment in these quarters equaled 41% and 51% of the average quarterly levels in 2021.

It’s not unheard of for VCs to pull back in times of political and economic uncertainty, but the descent is not usually this severe. As the downturn in VC investment is greater than the fluctuations it normally experiences with economic cycles it is possible that larger, more structural, issues in the sector were uncovered by the political and economic risk in 2022.

2022 marks the lowest number of rounds by the UK ecosystem seen in the past five years, over 1,200 less than 2021 levels. 

(Source: Tech Nation, Dealroom, 2023)

In addition to the fall in total investment of $250m+ rounds in 2022, a 61% fall in the number of rounds was also seen. Both ends of the investment round spectrum – high value rounds equalling $250m+ and low value rounds equalling less than $1m (pre-seed) – encountered the largest percentage falls (with pre-seed rounds falling by 41%). In fact, the total decrease in the number of rounds by 1,207 was driven by the sharp decline in pre-seed and seed rounds. A fall of 1,129 rounds.

The proportion of investment into UK tech companies by round size mirrors international proportions into 2021 and 2022.

(Source: Tech Nation, Dealroom, 2023)

For pre-seed and seed round proportions, this moves the UK to the 3.0% to 5.6% levels which were experienced internationally over the past five years. This, however, is a notable fall from 14.4% and 9.5% proportions seen in the UK in 2018 and 2019 respectively.

This partly suggests that we are seeing the market mature, as a much larger proportion of investment is going into $100m+ rounds (47.7% in 2022). However, when you couple this with the 1,129 round decrease in pre-seed and seed rounds between 2021 and 2022, another prognosis transpires. The pipeline of businesses supported at an early stage five years ago, that went on to raise record levels of investment in 2021, are now reaching scale and the UK has not continued to invest at the early stage. As a result, there may not be a strong pipeline of companies for the next five years, which in turn may lead to a prolonged downturn in investment for the UK. 

London and the South East of England continue to perform strongly in terms of investment volume

(Source: Tech Nation, Dealroom, 2023)

Total investment into Greater London dwarfs all other UK regions, and the gap has risen from Greater London being 10.4x greater than the next largest tech region (in terms of investment), the South East. 82% of all UK investment goes into either London or the South East. Contrary to this, the proportion of unicorns in these 2 regions is not proportional to investment levels (it equals 74%), and highlights, by this measure, that Greater London and the South East are not disproportionately 'better' at creating and building the highest value startups and scaleups in the UK. With inequality in investment for companies founded in these areas they must overcome more to get to this level of success. Thus, the potential the country could unlock by increasing opportunity to VC capital is immense. 

The East Midlands and Northern Ireland have seen the sharpest increases in investment over the last four years - continuing to see growth from 2021 to 2022, where most other nations and regions witnessed a downturn

(Source: Tech Nation, Dealroom, 2023)

The East Midlands has bounced back from its 2018 VC investment drop with four years of exponential growth topping at 314.2% in 2022. This is largely driven by megarounds into ThinCats in 2021 ($200m was invested in June 2021), and the Access Group in 2022 ($1bn was invested in June 2022). All other regions have seen fluctuations in the growth rate over the five year period, with large instances of investment growth in 2022 in line with global bounce banks investment post-covid. The only other region to yield positive investment growth in 2022 is Northern Ireland, with their third consecutive year of positive investment growth. 

Outside of London, Oxford and Cambridge take leading positions with exemplary levels of investment seen in 2021

(Source: Tech Nation, Dealroom, 2023)

In 2021 $1.8bn was raised by companies in Oxford; and $1.5bn in Cambridge. It is hard to deny the impact of the world-renowned academic institutions. These incubate technologies and supercharge talent pools providing the necessary inputs to turn an idea into a scalable technology business. 

Manchester is also a key tech city in the UK. With two consecutive years of investment growth, 2022 investment now only falls short of investment into Cambridge by $33k. The city is also home to five unicorns, notably The Hut Group and Matillion. 

Case study

Raising investment outside of London

Neil Andrew, Founder and CEO

Lunio (HQ in Manchester)

What was your experience raising VC funding as a company based outside of London?

Our experience was two-fold when it came to raising funds outside London. For international investors (most notably those in the US), it was exactly the same as it would have been raising within London - as it was all handled remotely anyway. 

For UK-based investors, we noticed a strong “London-centric” approach that didn’t really take into account the needs of companies based outside the capital. For example, it was expected that it wouldn’t be an issue for us to travel to London to meet face-to-face the next day (or even same day), when in reality the public transport network in this country and particularly in the North doesn’t support that, especially in terms of cost!

The vast majority of funds were based in London, and those we spoke to who weren’t had extremely suppressed expectations of valuations and outcomes, meaning they weren’t a good fit for what we were looking to achieve. 

Ultimately we did raise from a London-based VC, who thankfully handled the majority of the process remotely which was ideal. This allowed us to complete our Series A with a significant (£13m) raise, which has propelled the business forwards over the last 6 months. 

Are there specific challenges accessing investors or funding sources for scaleups based in your region specifically or outside of London generally? 

At least for Seed & Series A there is an expectation of face-to-face meetings and travel at very short notice, which is difficult to organise when travelling several hours (on poor public transport networks) to get there. The cost is also prohibitive; it wasn’t uncommon for us to need to spend more than £250 in train tickets for travel in a single day, not to mention the time wasted travelling back and forth. 

The majority of networking events also take place in the capital - even the UK’s second city, Manchester, has no more than one or two VC/investment networking events each quarter. The whole industry is extremely London-centric. 

Click to read more

Leeds, Belfast and Manchester bucked the downturn from 2021 to 2022, achieving growth in investment year on year

(Source: Tech Nation, Dealroom, 2023)

Investment into companies with at least one female founder sits at 11% in 2022, and has barely changed over the last five years 

(Source: Tech Nation, Beauhurst, 2023)

Inequality in access to finance does not stop at where a company is founded – it is also subject to who a company is founded by. Looking into companies where we have information on the gender of the founding teams, we see the proportion of VC investment going into companies with at least one female founder sits between 8.7% and 12.5%. 

As the size of the investment cheque increases the likelihood of a non fully male founding team receiving investment decreases. For investments lower than $1m, 19.2% of total investment investment goes to companies with at least one female founder whereas for investments between $100-250m only 1.07% of total investment investment goes to companies with at least one female founder.  

(Source: Tech Nation, Beauhurst, 2023)


Global investment

The UK takes back its position as the third largest tech ecosystem in the world for VC investment in 2022, though may see increasing pressure from India and emerging ecosystems like Indonesia and Mexico over the next five years. 

(Source: Tech Nation, Dealroom, 2023)

Over the past decade, the UK and India have jostled for the third spot for total investment into startups and scaleups. This year the UK took back this spot, and is third to China (2nd) and the United States (1st). India, now the most populated country in the world, is now set to follow in China's footsteps. The country is set to be a global tech superpower but when it is able to mobilise its talent at mass is still unclear. 

US dominance remains seemingly unshakable with investment equalling 4.3x more than China and 7.7x more than the UK in 2022. Similar proportions were seen between China in 2021 (4.4x) but there was a slight decrease in America's advantage over the UK (moving from 8.7x in 2021 to 7.7x in 2022). 

A record year for France enabled it to propel to the fourth most funded nation globally and second in Europe (overtaking Germany). The UK remains the dominant player in Europe with investment into the UK startups and scaleups remaining greater than investment into France and Germany combined. 

Singapore and Israel consistently invest the most in tech startups and scaleups when looking at it as a largest proportion of nominal GDP

(Source: Tech Nation, Dealroom, 2023)

Investment relative to the size of a country's economy was analysed to give a sense of the relative scale of the startup and scaleup sector, and how it compares with other sectors. This in turn signals how entrepreneurial a nation is, and how much a population has the opportunity to engage with cutting edge technology – whether that is via employment or using the technology in their daily lives. 

Singapore and Israel have outshone all other countries considered for the past five years with 1.82% and 1.56% of GDP being invested into startups and scaleups respectively. Both nations are known for their technological spirit, and so this does not come as a surprise. The top industry both globally and in Singapore is fintech but we see a different picture in Israel. Security is its top industry with 23% of all investment going into a startup and scaleups with a security element. In fact, aside from the United States the Israeli security industry for startups and scaleups receives more investment than any other nation. 

Targeted policy measures, like developing 300 R&D centres and investing more in R&D as a proportion of nominal GDP than any other nation (5.44% according to the World Bank in 2020), is one method which has helped Israel propel into a high tech economy. 

South Korea is the second highest R&D spender as a proportion of GDP (4.8% according to the World Bank in 2020) and sees 0.36% of GDP go towards startups and scaleups. Despite having a much larger economy, absolute investment levels in 2022 are also below both Singapore ($7.7bn) and Israel ($8.2bn), sitting at $6.8bn. At a first glance, these figures surprise you, but when you look back over a decade you see how far South Korea has come. In 2012 South Korea ranked 19th and invested less than $100m into startups and scaleups. Moving to the 10th position is an impressive feat. 

France, Italy and Sweden are the only countries to see positive investment growth after the record covid bounce back year of 2021. Among many decreases in investment, the UK experienced its highest decrease in five years at 24.7%. 

(Source: Tech Nation, Dealroom, 2023)

Record levels of investment after bouncing back post covid – with the value of investment tripling in high tech economies like South Korea – intensifies the slow down in investment seen in 2022. The UK is not shielded from this and investment was three quarters of the 2021 levels (decreasing by 24.7%). Coming in at 8th for year-on-year change in growth between 2021 and 2022, the UK outperformed giants the United States and China. Investment into UK tech startups and scaleups did not prove its resilience to a downturn in global investment, which sets it apart from countries like Italy, Switzerland and France. These countries all experienced positive growth in 2022. 

France’s investment growth figures are particularly impressive; it is the only country to have experienced positive growth in every year over the past decade. The following policy measures have clearly yielded fruitful results: 

  • The government backed startup agency, namely La French Tech Mission, launching growth programmes in agritech, healthtech and climate tech. 
  • Bpifrance, the country’s state bank, investing a whopping €500mn into deeptech startups and scaleups. 
  • France 2030: the €54bn Investment Plan aiming to sustainably transform the key sectors of their economy – energy, automotive, aeronautics and space – through research, innovation and industrial investment.

China, Japan and Russia are the only three countries which face negative compound annual growth rates between from 2018 to 2022. 

(Source: Tech Nation, World Bank, 2023)

Looking at the compound annual growth rate of international investment over the past five years, we see tremendous returns for all countries bar three. Startups and scaleup investment is marred in the same way economies in these nations are suffering; for Japan and China it's a result of the lingering impacts of COVID-19; and in Russia it is a reaction to its invasion of Ukraine. 


Global tech hubs

The Bay Area experienced its first decline in investment since 2016 but still landed its second highest levels of investment on record in 2022. 

(Source: Tech Nation, Dealroom, 2023)

The United States is home to three of the top four tech hubs in the world, and 30% of the top 20 tech hubs in the world. The Bay Area is at the top of this and is a league above the rest. Investment dipped in this hub between 2021 and 2022, moving from $124.9bn to $74.2bn, but is still over double the investment levels of any other tech hub.

The next three – New York City, Greater London and the Greater Boston Region – are all $20bn+ ecosystems. Greater London and Greater Boston have followed similar trends, and this year London comes out on top. $21.9bn was invested into London in 2022. 

From 2018, Beijing and Shanghai have seen slow decline and as of 2022 Beijing startups/scaleups raised $4.4bn and Shanghai startups/scaleups raised $4.9bn. It’s not all woes for Chinese ecosystems; Shenzhen in Guangdong has seen stable and methodical growth throughout the decade, and was one of three tech hubs to see positive growth in 2022. The other two were Paris and the Greater Helsinki area.


Tech Sectors

The UK majors on fintech, health and energy with $11.5bn, $3.5bn and $3.3bn being invested in the respective industries

(Source: Tech Nation, Dealroom, 2023)

UK fintech startups and scaleups raised over $11bn in 2022, more than any country apart from the US. Within the industry that is 3.3x larger than any other industry in the UK, three sub industries stood out: 

  • Payments ($3.0bn in 2022) with companies like and GoCardless both receiving late stage rounds in 2022. 
  • Wealth Management ($2.5bn in 2022) which saw 20% of global investment into the sub industry go to UK startups and scaleups. 
  • And Banking ($1.8bn in 2022) a sub industry known for UK’s neobanks like Monzo whose annual revenues shot up by 250% in the 12 month lead up to December 2022, and Starling Bank who raised $131m from top tier players in the banking world including Goldman Sachs. 


Climate tech investment trends

Sammy Fry, Net Zero Lead

Tech Nation

Investments into climate tech are still on an upwards trajectory, flying in the face of the geopolitical and macroeconomic turmoil that has affected most capital markets. The continuation of growth is thanks in part to more than 300 climate and impact funds being developed in the past 3 years, which has tripled the amount of funding going into the sector to $270 billion. This is coupled with a boost of government funding through the EU Green Deal and in the US, the Inflation Reduction Act, which could in turn generate almost $1.5 trillion in public and private funds. 

The growth of the sector is reflected in the growth of the climate tech companies who have been through Tech Nation’s Net Zero programme. Since the programme’s inception in 2020, where it was formed to increase the growth of the UK climate tech ecosystem, the overall level of investment into the companies part of the programme has skyrocketed from £450 million to over £1.1 billion, far outpacing the average growth of start-ups across the tech and wider climate tech sector. Levels of investment equates to an average increase of £6.3 million per company, with companies who have joined the programme within the last 6 months already equalling that growth average. With the majority of the 108 companies being at seed stage when they first entered the programme, it is a testament to the tenacity, innovation and resolve of the companies involved. It shows the importance of accelerators and supportive national ecosystems in order to safeguard companies' growth and represents the increasing levels of support and adoption from the UK public and private sectors.

Click to read more

Behind fintech, health startups and scaleups received the most investment over the past five years. “COVID revenues”, where companies saw a boost in their financial performance as a result of COVID-19, led to especially high-levels of investment in 2021 (equalling $7.5bn). The energy startup/scaleup industry followed health with a $1.0bn increase between 2021 and 2022. This moved total investment into energy as a sub industry to $3.3bn. 

Between 2018 and 2022, transportation’s compound annual growth rate (CAGR) dramatically outperformed all other industries in the UK and global growth in the industry. 

(Source: Tech Nation, Dealroom, 2023)

Transportation saw the highest compound annual growth rate (CAGR) between 2018 and 2022, equalling 66.4%. When you compare this with the international CAGR (-1.7%) the UK CAGR for transportation is even more spectacular. Gaming follows a similar pattern with the UK CAGR equalling 62.4% and the international CAGR equalling 5.3%. A clear comparative advantage is emerging and UK investors should capitalise. 

Investment into British fintech and energy startups and scaleups is not only a leader in terms of absolute investment in the UK, but also a leader in terms of growth (CAGR) over a five year period internationally. As we try to transition to clean energy, VC investment will continue to increase and it is exciting to see UK startups and scaleups leading the charge. UK fintech investment growth dramatically outstripping international CAGR rates (42.4% vs. 10.0%) is even more exciting. It demonstrates the UK’s ability to not only build a world-leading industry but maintain its position at the forefront of an industry. 

Investment into semiconductors and cloud/ hosting industries has seen harsh declines when compared to international trends. The UK saw a 1.6% decline compared to a 26.2% rise in semiconductor investment, and a 50.1% decline compared to a 7.2% decline in hosting: 

  • Demand for semiconductors drastically outstripping supply – which was hampered by the pandemic – in 2021 led to a scarcity in semiconductors. It resulted in unheard of wait times for new cars and slow roll out of new games consoles (Sony’s PS5 & Microsoft’s Xbox One). This resulted in the second highest CAGR of investment into semiconductor startups and scaleups internationally (behind energy). 
  • The UK’s lacklustre year in 2022 is not fully representative of the strength of the UK's semiconductor ecosystem. Graphcore and Xsight Labs are the epitome of this, and were both able to raise serious amounts of capital in 2018 and 2020. For Graphcore, the Bristol based microprocessor developer for AI and machine learning applications, this was $200m in 2018 and a further $372m across two rounds in 2020. Similarly, Xsight Labs manufacture chip-set semiconductors but are focused on data centres for the automotive sector. They raised $20m in 2018 and $80m in 2020. 
  • Moreover, some of the most innovative advances in the semiconductor industry are continuing to happen in the UK. Paragraf, the Cambridge University spinout who are the first company to scaleably mass produce graphene for the semiconductor industry, is testament to this. In 2022 the company raised $60m. 
  • UK hosting companies are finding it ever more difficult to compete with now established cloud services. Thus, the significant decrease in hosting investment is no surprise. The 7.2% decrease internationally tells a different story. Sizeable rounds into companies like Snowflake, the data-warehouse- as-a-service company, demonstrate that it is possible to find your niche and compete with the cloud giants. UK founders and investors should not shy away from founding or supporting hosting related businesses.

Alternative finance

In 2022, venture capital investment made up a maximum of 25% of all funding types reported to be used by startups/scaleups at every stage of investment. 

(Source: Tech Nation, 2023)

With VC investment making up a maximum of 25% of all investment raised, the scope of funding mechanisms founders need to engage with to finance their business is great. Everything from grant funding, debt financing and crowdfunding is considered by businesses. Angel investors are signalled by companies at all stages to have a high level of importance when looking at funding types, with 17-26% identifying this as a way their business was funded in 2022. Own funds index highly for seed stage businesses but take a lower weight for companies as at later investment stages, moving from 20.6% at Seed to 3.6% at Series C. 

33.7% of startups and scaleups bootstrap at some point in their growth journey

(Source: Tech Nation, 2023)

UK Grant funding peaked in 2020 with 3,945 grants issued and $1.1b worth of support provided. Innovate UK is the greatest issuer of these grants to UK companies. 

(Source: Tech Nation, Beauhurst, 2023)

In 2020 we saw the peak of grant funding over the five year period with 3,945 grants being issued equalling a total of $1.1bn. Throughout this time Innovate UK has provided the largest amount of grant support equalling 66.1% of all grant funding.  

Horizon 2020 (H2020) was the EU's research and innovation funding programme from 2014-2020 with a budget of nearly €80bn, and UK headquartered companies were able to benefit from this in this time and beyond. In fact, $320m worth of H2020 grant funding was issued to UK companies between 2018 and 2022 making up 7.21% of all grant funding in this period. 

Looking at the most recent investment round before the date the grant was issued, if the company has raised any investment at this point, we are able to gauge how well developed startups and scaleups were when receiving a grant between 2018 and 2022. Across the five year period the proportion of companies who had raised a maximum of $1m before receiving a grant ranges from 53.3% to 77.5% signalling the early stage nature of the companies which are receiving grant funding. For startups and scaleups the funding often enables them to hit the necessary technological milestones which move their company from an exciting technology to a viable product. Venture capitalists are typically unwilling to take this risk, especially for deeptech companies where the impact is unclear. However, these are exactly the types of companies which are solving the biggest problems in society. Thus, grant funding is an essential mechanism to support these technologies to get to market and make impact at scale. 

EIS and SEIS - the foundations of the scaleup ecosystem

The bones of the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are a tax relief system to encourage individuals to invest in early stage scaleups. For EIS an individual can invest up to £1m for a 30% tax break and SEIS up to 50% for a £100k tax break. For example if you use SEIS to invest £10,000 into a scaleup, £5,000 can immediately be claimed against on your tax return. Finally, if the shares are eventually sold at a loss or the company goes bankrupt then a proportion of the loss can also be offset against capital gains or income tax. This is known as loss relief. In its most gainful form, using all three (SEIS, EIS and SEIS/EIS loss relief) after a business goes bankrupt, an investor can recoup up to 77% of their original investment, dramatically reducing any costs associated with the loss. 

While it may seem  like a lucrative scheme for high net worth individuals, it is in fact a lifeline to scaleups which is what the scheme was designed to do and where the true benefits lie. The scheme is to enable small startup companies to attract their first (and riskiest) investment round, and should be viewed as a mechanism for the government to support all companies at this stage. Moreover, the policy is immensely efficient as it encourages vast swathes of capital into this space for a relatively small cost to the government. With this in mind, it is remarkable to see that over 20,000 and over 30,000 applications have been approved for SEIS & EIS over the last decade respectively.  

Number of SEIS advance assurance applications received, approved and rejected, April 2017 to 2022

(Source: Tech Nation, HMRC, 2021)

Number of EIS advance assurance applications received, approved and rejected, April 2017 to 2022

(Source: Tech Nation, HMRC, 2021)



Index ventures is the most active investor in the UK by the total value of deals participated in, and second by number of deals conducted.

As can be seen from list of top UK investors below, many are operating as stage generalists - the likes of Index, Barclays, Atomico, 83North, Balderton, and Northzone conduct range from the very early stages of growth, to around Series C - encompassing a broad range of startups and scaleups. Operating at a later stage, the likes of Apax, 3i Group, Permira, Baillie Gifford, and larger institutional investors such as HSBC tend to conduct deals of $50m plus.

Investor nameHQ cityDeal sizeAverage round size ($mn)Number of exits over $100mnNumber of roundsNumber of exits over $500mnNumber of exits over $800mnParticipated in deals totalling ($mn)
Index VenturesLondon50K - 75M38851026473936376
Apax PartnersLondon100M - no limit2031202272315295
PermiraLondon400M - 500M2662190201758765
Baillie GiffordEdinburgh150M - 400M35632139302945916
3i GroupLondon50M - 150M2023331766967
GP BullhoundLondon5M - 15M53878653820
AtomicoLondon0K - 75M5214210111010430
LocalGlobeLondon500K - 2.5M913380653084
83NorthLondon10M - 30M36212461188377
Anthemis GroupLondon2.5M - 10M1410224553024
HSBCLondon75M - 200M411420112104431
Balderton CapitalLondon0K - 20M233140818158660
BarclaysLondon10M - 30M241515412125106
NorthzoneLondon0K - 10M3516279658710
Felix CapitalLondon50K - 10M498107664893

(Source: Tech Nation, Dealroom, 2023)

This richness in the UK is to be celebrated, however, there are few hyper-active investors providing funding over $500m - sums seemingly needed more than ever in the UK as the ecosystem matures and increasingly incubates companies seeking larger late stage mega-rounds.

Crowdcube tops the charts for most active UK investors - with over 1,300 investments made since its launch in 2010.

When looking at the number of investments made, Crowdcube, Seedrs, and Seedcamp shoot up the rankings. They are joined by instrumental UK investors like Octopus Ventures, LocalGlobe, and Scottish Enterprise, who tend to invest at earlier stages of company development.

(Source: Tech Nation, Dealroom, 2023)

84% of the most active UK tech investors are based in London, with a long tail of investors in Glasgow, Edinburgh, Oxford, Cambridge, and other buoyant UK tech hubs.

The VC landscape in the UK remains heavily skewed to London, with a long tail of investor locations including Glasgow, Edinburgh, Cardiff and Sheffield. Capital cities have long been prime locations for the clusters of financial services firms, regulators, and, of course, government - which in part, explains contemporary patterns seen. However, with a decentralisation of value creation seen by tech (note the presence of $1bn+ valued companies in 22 UK cities, compared to just five cities in 2012), accepting the status quo of investors clustered in Southern England no longer seems representative of the broader landscape.

The majority of UK investors into tech are VCs, at over 56%, with angel investors, and angel funds playing an important role, making up 13% of investors.

(Source: Tech Nation, Dealroom, 2023)

40% of investors are geared to providing seed stage investment, while around 25% specialise in Series A firms, and just 7% in Series B and C stage tech companies

(Source: Tech Nation, Dealroom, 2023)

While this doesn’t marry with the investment volumes we see being plugged into UK startups and scaleups, the preponderance of investors with a preference for seed stage firms aligns to the reality that there are many more companies at this early stage to potentially invest in, and lower barriers to entry to participate as an investor. As discussed, the favourable taxation environment for investors seeking to take equity in early stage companies may also play a part in this finding.

However, it appears that there is a gap in Series A+ investors in the UK, a gulf filled, in the most part by US and Asian investors, who tend to lead on later stage rounds - many of which we would classify as mega rounds, over $100m in value.

Domestic investment has increased as a proportion of all UK tech funding from 26% in 2021, and 29% in 2022, up to 36% in 2023 so far

(Source: Tech Nation, Dealroom, 2023)

This may be reflective of a slow down in Asian, and rest of the world investment from the record year for VC investment in 2021. An increase in the number of mature, better funded UK-based VCs, which have record ‘dry powder’ or capital ready to deploy, may have enabled more UK investors to fund at later stages, where historically, there has been a tendency to invest in early stage UK tech companies.

US investors have continued to pile into UK tech deals, with investment from the States increasing to 33.3% of the total in 2022, up from 32.6% in 2021, and over a 10% uplift from 22.5% in 2019.


Future finance

Addressing current gaps in access to finance for UK startups and scaleups could contribute up to $450bn in additional value to the UK tech ecosystem over the next decade - pushing us towards the $4tn target.

Stakeholder recommendations

  • More patient VC investment is needed, forgoing short-term profit maximising in order to create positive change particularly for emerging energy technologies where a significant amount of R&D is required (e.g. nuclear fusion). With such emerging technologies, VC investors are put off by the perceived risk, yet these technologies need long-term sustainable funding. The government has often stepped in here with grants, but they also play a huge role in shaping markets. Decentralisation should be considered a realistic path forward. 
  • In light of the findings that London and the South East received the lion's share of VC investment, yet neither of these regions have proven to be disproportionately likely to create successful startups than other UK regions, VCs are encouraged to regionally diversify their investment portfolios. Flourishing startup ecosystems such as Edinburgh, Glasgow, Cardiff, and Manchester are rife for early investment.
  • We have seen that inequality in access to finance is not only observable by region and city, but also by the characteristics of founders themselves. Stark statistics tell us we have a long way to go to creating parity in investment to startups with female founders. VCs are again urged to confront biases in investing, and lean into diversity of innovation. Indeed VCs should commit to ambitious targets to rebalance their portfolios, in practice this could look like VCs investing in a certain number of startups with female founders per year, and even a certain number of startups with founders of colour per year. Another promising action VCs can take is to create more consistency when questioning both male and female founders (given that female founders are routinely asked prevention-focused questions rather than promotion-focused questions, which leads to less funding; Kanze et al., 2017). In practice this means asking questions that probe the potential for gains and losses from all startups. This is a simple step that can improve VCs decision making quality by making sure all founders are asked the same questions in the same way.

Policy recommendations

  • Whilst there are hubs of tech innovation located throughout the UK, investment is often concentrated towards London based startups and scaleups. Indeed, The LDC Index revealed a large imbalance in R&D tech investment in the UK between London and other regions. In order to drive innovation and growth, more regional investment is needed, and diverse regional talent must be championed. One of the government's proposals revealed at the back end of 2022, was the Investment Zones scheme, which aims to drive economic growth by offering specific tax incentives and regulatory rules for dedicated geographic locations throughout the UK.
  • When it comes to implementing successful tech growth initiatives, the UK government could look to learn from aspects of what has been implemented in France and Israel. Governments of both France and Israel have invested heavily in their tech ecosystems (both financially and politically), and have started to reap the economic benefits. Policies that focus on funding for R&D are particularly encouraged. Government funded initiatives have proven to be critical for helping the UK tech ecosystem to grow, and such initiatives should continue to receive substantial investment.
  • We must not underestimate the impact Brexit has played on startups and scaleups in the UK, specifically with regard to R&D funding. Given the potential gaps in grant funding as a result of removal from the EU, and eligibility for Horizon funding, the UK government announced in 2022 it would implement new UK funded R&D programmes under UKRI with a focus on more global collaboration.
  • In a recent book by the preeminent economist Mariana Mazzucato (Mission Economy: A moonshot guide to changing capitalism), we are challenged to envision a new way of governance that champions innovation and sustainability as a means to secure a flourishing economy and society. Indeed, there exists a persistent economic myth that when it comes to investment, profit and purpose are mutually exclusive, yet this could not be farther from the truth. Governments should consider working in partnership with the private sector, and rather than allowing profits to be privatised from public investment, they should attach conditionality to policies and investment, such that those invested in are encouraged to reinvest back into the economy. For evaluation of public investments, there is a need to also move away from linear cost-benefit analyses to better capture spillover knowledge and innovation created along the way. 


There are now just under five million people working in UK tech startups and scaleups and the tech economy more broadly, an increase from just under three million in 2019, and more than double the 2.18m working in the tech economy in 2011.

During the uncertain times faced by most people over the last two years, technology has been an enabler for individuals, companies and communities. It has facilitated new ways of working, and kept the economy buoyant. Tech has also been an important source of job creation as we return to a sense of normality. Nevertheless, we are not returning to the economy, or the labour market that we left in 2019. This is something that we have all seen clearly with significant redundancies made in big-tech companies over the last six months, and continuing volatility in the labour market.

This significant ramping up of tech economy workers has been due, in part to the permeation and transformation of tech across the economy as a whole. Over 36% of people working in the digital tech economy are in non technical roles, and a further 30% of roles are in tech roles outside of the tech sector.

Despite efforts to shed light on labour market dynamics in, and around tech over the last few years, there remains a dearth of data around skills, progression and up-skilling opportunities and career trajectories for tech leaders. The lack of this data could be leading to less informed decisions on the part of both employers, and employees. 

This chapter aims to address some of these persistent gaps, exploring the tech workforce, and characteristics of tech workers, leadership in tech, skills and talent gaps, and compensation.


5 Focus areas for People

Wanda Haddock, Scale Coach - Talent Specialist

Tech Nation

Undoubtably people are the literal lifeblood of any company and for scaling companies their people are often the biggest success differentiator - “at the end of the day you bet on people, not on strategies” as Lawrence Bossidy famously put it.

Based on the Tech Nation Report 2023 which clearly outlines some key people challenges, here are 5 focus areas for scale ups that can positively impact their growth whilst aiding systemic change:

  1. Focus on diversity and inclusion: The report once again highlights the gender and diversity gap in tech and one cannot discuss diversity without also simultaneously talking about gender pay-gaps. However, it has been proven that companies with a diverse workforce perform better financially and have higher rates of innovation and problem solving – obviously core competencies in rapidly evolving companies striving for market-fit and accelerated growth. With such obvious wins, why is the focus on securing and growing diversity and closing any gender pay-gaps not a top priority for scale ups? Diversity is one step but diversity doesn’t equal inclusion and so creating psychologically safe environments and the conditions that actively encourage inclusion is critical to ensure that diversity efforts are not simply seen as diversity-washing but have genuine impact. Encouraging more women and minorities to enter the tech industry (in both technical and non-technical roles) and providing support and development opportunities to move women and minorities into more senior roles, can help shape the ecosystem. No scale up is too small to have a D+I plan and a pay-gap policy. If you aren’t proud of yours, ask why? Making these visible can be powerful employer branding tools, providing you follow through authentically and action them.
  2. Invest in upskilling and reskilling: The report outlines the constantly evolving tech demand, with new technologies emerging and changing job requirements being constant, what were top required skills yesterday, are not necessarily top required skills today. Upskilling and reskilling your people as you grow, can help companies keep up with industry developments, boost employee morale and retention, and increase productivity. Learning and development budgets should be built-in early not as a nice to have but as an essential part of employment to encourage employees to develop new skills to meet changing demands. This upskilling should also include developing skills that are critical to scaling such as working & leading in complexity, developing emotional agility to deal with constant change and building resilient high performing teams.
  3. Build a strong leadership team: The report highlights the critical role of strong leadership and the high demand for strong leadership in driving company success. Founders, although the most obvious to lead, are sometimes not the best equipped or experienced people leaders. Scaling up companies should prioritise building a strong leadership team that can guide the company through the challenges and opportunities of growth. Developing a clear vision, fostering innovation, and prioritising employee development and engagement can help scale ups create the circumstances for a motivated, engaged, and aligned team to achieve and adjust as needed.
  4. Be considered and intentional about the size of your team: workforce sizing in order to deliver on projected growth and planning should be done with deep consideration and not overenthusiastic grandiosity. Having to downsize can have a dire effect on both employer brand and employee experience and depending on how any necessary downsizing is handled, it can potentially have far reaching consequences on internally engagement, future hiring and longer term profitability.
  5. Get help: when it comes to people – there is always both the transactional aspect and the relational aspect to consider, we are human after all. It’s often the relational aspects that trip us up as companies rapidly scale. Luckily good advisors, mentors and coaches who have walked that people scaling journey previously and understand the risks and potential huge payoffs can help. Lean-in.

Tech workforce

Women are still heavily underrepresented in tech, in fact no European country reaches 30% representation of women

The country with the highest gender pay gap is Ireland. Portugal, the UK and the Netherlands are close to reaching equality. In fact, by looking at a city level, we see that in Leeds, women in tech are better paid than men, and Bristol's salaries only differ by 0.2%. However, the average gender pay gap difference is still 6%.

(Source: Tech Nation, TalentUp, 2023)

In the UK, Edinburgh is the city with the highest proportion of women in tech, followed by Newcastle and Cambridge. All three are above 30%. The rest are around 25% (UK's average).

(Source: Tech Nation, TalentUp, 2023)

While some job positions and cities have higher percentages of women than others, none of the job positions or cities have reached gender parity. This suggests that there is still work to be done to achieve greater gender diversity in the tech sector workforce.

The top roles for representation of women include Business Analyst, at 40% women, and Product Manager at 39% women - the latter representing a role that has emerged over the last decade, most acutely over the past 6 years. This recent surge in demand may, in part, open the door to greater levels of diversity and lower levels of embedded inaccessibility.

PositionLondonBirminghamLiverpoolManchesterEdinburghCardiffUK average
Business analyst40%40%46%45%39%38%40%
Product manager43%36%44%39%40%33%39%
Sales executive42%30%36%38%38%31%36%
Content creator57%43%42%55%27%25%34%
Data officer40%40%
Functional consultant42%33%
Frontend developer31%33%17%21%30%32%33%

(Source: Tech Nation, TalentUp, 2023)

Positions with the lowest levels of gender diversity include Machine Learning Engineering,

PositionLondonBirminghamLiverpoolManchesterEdinburghCardiffUK average
Machine learning engineer26%32%17%7%11%17%17%
React developer15%4%
IT consultant31%13%29%19%25%10%17%
Technology consultant36%19%17%15%13%20%17%
Web developer25%11%
IOS developer30%13%18%22%

(Source: Tech Nation, TalentUp, 2023)

The proportion of people from underrepresented ethnic groups working in tech has increased over the last five years, but by less than 2%, highlighting continued inequality of access to tech roles

(Source: Tech Nation, ONS, 2022)

Case study

Diversity in tech

Rodney Appiah, Managing Partner

Cornerstone VC

Cornerstone VC is an early stage fund focused on a ‘people first’ investment strategy, investing at pre-seed and seed in UK tech companies led by diverse founding teams.

How would you describe the current state of diversity among the workforce in UK tech and at UK tech scaleups?

I think the picture is mixed. I’m encouraged by the growth of hiring initiatives that are seeking to encourage more candidates from diverse backgrounds to start a career in tech including the work carried out by Colorintech,  Code Untapped, UK Black Tech, Coding Black Females, BYP, Love Circular and Makers Academy to provide a few examples. This work is starting to have an effect with the last Tech Nation Report on diversity and inclusion in tech noting that the industry has a marginally higher proportion of people from ethnic minority backgrounds when compared to the labour market as a whole at 15.2% vs 11.8% (although this remains below UK ethnic minority representation at 18% - 20%). However, the tech industry continues to lag behind when it comes to hiring women, where representation in the industry is around half that of the entire labour market (28% vs 50%). Additionally, there is a lack of senior tech talent from diverse backgrounds in the UK with issues around retention, pay and promotion continue to persist. So in summary – diversity in tech is improving but we have a lot more work to do.

What are the current challenges to creating a more representative workforce and are there solutions / interventions you believe would tackle these?

I think there has been a concerted effort across the industry to improve the volume of candidates coming from underrepresented backgrounds on account of gender, ethnicity or another underrepresented characteristic. However, the challenge remains in retaining these individuals within their respective roles and organisations. Wiley Edge’s diversity in tech report (2022) for example noted that 64% of businesses that they surveyed admitted that they were struggling to retain diverse employees despite 65% stating that they work hard to foster an inclusive company culture. To address the issue of retention, more consideration should be given by tech employers to i) providing mentoring and professional support to entry level candidates, ii) ensuring employees have sufficient opportunities to provide candid feedback about the working environment and iii) encourage more clarity on the rewards of progression within the firm.

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Tech remains better representative of the UK population, and the UK labour market as a whole, but is improving in representativeness at a slower pace

The most recent Census in 2011 highlights that in England and Wales, 80% of the population were White British. Asian (Pakistani, Indian, Bangladeshi, other) ‘groups’ made up 6.8% of the population; Black groups 3.4%; Chinese groups 0.7%, Arab groups 0.4% and other groups 0.6%.

(Source: Tech Nation, ONS, 2022)

(Source: Tech Nation, ONS, 2022)

Greater London (30.1%) and the West Midlands (17.4%) are leading in the UK for proportion of underrepresented ethnic groups in digital jobs - across the UK, tech is not representative of the ethnic diversity of the UK population.

As well as looking from a sectoral and workforce perspective, it is important to take a finer grained regional and city based approach to understanding diversity of the tech workforce, cutting the high level evidence down to size for informing targeted local interventions.

  • Wales has the highest proportion of tech employees under 35 years of age, at 51%, followed by London at 48.7%, and the North East at 46.1%.
  • London has the highest proportion of women working in tech, at 28.4%, just over half the proportion of the workforce more broadly. London is followed by the South East of England, with 27.7%.
RegionAll jobs - FemaleAll jobs - underrepresented ethnic groups
All jobs - Under 35Digital jobs - FemaleDigital jobs - underrepresented ethnic groups
Digital jobs - Under 35
North East51.0%.38.5%21.0%.46.1%
North West49.9%8.1%39.6%25.0%9.5%39.4%
East Midlands49.3%10.9%38.6%25.4%16.3%38.6%
West Midlands49.0%15.5%39.4%22.9%17.4%39.8%
East of England50.1%8.9%37.4%24.7%12.8%42.0%
South East49.9%9.7%37.4%27.7%11.5%34.0%
South West50.6%5.0%38.9%20.3%5.3%40.7%
Northern Ireland50.4%4.9%38.7%27.0%4.2%45.7%

(Source: Tech Nation, ONS, 2019)

Wolverhampton and Walsall (41%), Blackpool (37%), Cambridge (35%), Milton Keynes (35%) and Merthyr Tydfil (39%) are leading for the representation of women in digital roles

When we look at the breakdown of the tech workforce for UK cities, it is clear that some are more diverse than others - this information could be used as a starting point to explore the inclusiveness and diversity of tech companies in these cities, and form the basis for local interventions from respective tech communities, as well as learning from good practice that exists across the UK and in leading tech firms:

  • Portsmouth (11%) and Bristol (13%) are lagging in the proportion of women working in digital roles.
  • Birmingham (28%), Leicester (32%) and Coventry (30%) have the highest proportion of underrepresented ethnic groups in digital tech roles, though data across UK clusters is patchy. However, Leicester is the only UK cluster representative of the ethnic composition of the UK workforce more broadly, and this is likely a local underrepresentation, based on the working population of that city.
CityDigital jobs - FemaleDigital jobs - underrepresented ethnic groups
Digital jobs - Under 35All jobs - FemaleAll jobs - underrepresented ethnic groupsAll jobs - Under 35
Slough and Heathrow22%52%41%50%38%36%
Warrington and Wigan29%.29%52%.36%
Middlesbrough and Stockton24%.49%52%.38%
Wolverhampton and Walsall41%15%36%52%17%39%
Falkirk and Stirling28%.36%54%.43%
Merthyr Tydfil39%.56%50%.39%
Bangor and Holyhead......
Milton Keynes35%19%25%50%12%38%

(Source: Tech Nation, ONS, 2019)


Leadership development is crucial at every stage of development with at least 50% of senior leaders recognising this as a scaling challenge for their business at every investment stage.

(Source: Tech Nation, 2023)

Exploring the composition, and characteristics of senior leaders, we notice trends across UK tech, which may suggest concrete initiatives to ensure better representation moving forward.

Tech C-suites are highly qualified, with nearly 75% educated to undergraduate level, and nearly 50% with a Masters degree

(Source: Tech Nation, LinkedIn, 2022)

World-leading educational institutions top the charts for tech C-suite education - highlighting a potentially problematic position of 'tech-clusivity'

(Source: Tech Nation, LinkedIn, 2022)

The University of Cambridge and The University of Oxford (Oxbridge) top the leaderboard for educational institutions making up a combined total of 4.6% of educational experiences among UK scaleup leaders. Comparatively, 1% of UK students get a place at Oxbridge according to a study from 2012. This highlights, on the one hand, the academic pedigree of leadership teams, but given the nature of some of these institutions, shows that inequality of access to certain types of education could be a driver of underrepresentation in tech more broadly.

Two international universities feature in the top 25: INSEAD or, Institut Européen d'Administration des Affaires; and Harvard Business School. Like London Business School, this is more a symptom of the large quantity of MBAs reported in a profile’s education section. Due to the relevance of this to building a business, people are more likely to include this in their profiles and so fill out the education section. As a result the figure may be proportionally higher than reality. 

Other than Oxbridge, all other educational institutions have a percentage of 1.5% or below. In fact, across all educational experiences there are 16,000 unique educational institutions. This range of educational institutions, and so education, is encouraging to see. It demonstrates senior leaders’ ingenuity to seek out the most suitable education for their needs. The Open University’s position at 13th supports this and signals the importance senior leadership put on a more flexible education system. 

Computer science, Economics and Engineering top the education charts for C-suite tech professionals in the UK

(Source: Tech Nation, LinkedIn, 2022)

Computer science and economics top the charts for field of study for tech C-suite

Computer science, economics and law are the top three fields of study. It is unsurprising to see computer science at the top as a large proportion of emerging technology companies focus on computer science themes. All subjects, including computer science, make up a small percentage of the total. With this in mind, all fields of study can support people to C-Suite positions. 

Similar to the top subjects for all C-Suite and Director positions, computer science and economics feature highly when focusing on specific job roles. The more specialist roles, CTO and CFO, are met with more specialist degrees. For CTO this is computer science and STEM based subjects, and for CFO this is financial, mathematical and accountancy based subjects. The founder, CEO and COO top subjects are more broad but still include the specialist subjects outlined in the previous sentence. 

Scaleups and startups across the UK regions are looking to expand their revenue streams and customer base, and are in need of the necessary leadership team capabilities to support these goals.

(Source: Tech Nation, TalentUp, 2023)


Skills and talent gaps

Within the theme of hiring talent, scaling recruitment is the top challenge faced by startups and scaleups in the UK.

(Source: Tech Nation, 2023)

Series B stage companies project the highest median creation of jobs per company, peaking at 50 for Series B startups and scaleups.

(Source: Tech Nation, 2023)

Looking at data from over 7000 companies working in tech up to 2020, the top 20 most popular job titles in the UK tech sector are led by roles such as Project Manager, Software Engineer, Software Developer, and Account Manager, indicating a strong demand for positions related to managing and developing software and projects. 

(Source: Tech Nation, TalentUp, 2023)

Recent TalentUp data highlights the diversity of positions in the UK tech workforce, with a range of roles available from software development to business management and sales. Software engineer/developer positions continue to be among the most common positions. Furthermore, the presence of specialised roles, such as Frontend Developers and Data Scientists, indicates a growing supply of professionals with specialised skills. The data also underscores the importance of business-related positions, such as account managers and business analysts, in driving growth and profitability in the tech industry. Additionally, the significance of generating revenue through sales is emphasised by the presence of sales positions such as sales managers and representatives.

(Source: Tech Nation, TalentUp, 2023)

There is a high demand for Backend Developers in Cambridge and Golang Developers in London, with a significant talent gap to be filled. 

(Source: Tech Nation, TalentUp, 2023)

On the other hand, there is high competition among professionals for jobs like Business Analysts, Account Managers, and Data Scientists in London, where there are more professionals than job offers available.



The United Kingdom ranks fourth for senior-level salary, and third overall in terms of mid-level salary which is a positive sign for the UK's job market. 

In addition, the UK has a higher median senior salary compared to other European countries such as France, Italy, and Germany. The data suggests that the UK's job market is relatively strong, particularly for mid and senior level positions. However, there is still room for improvement in terms of increasing salaries for both junior and senior level positions to be more competitive with other top-ranking countries. 

(Source: Tech Nation, TalentUp, 2023)

The lowest salaries by seniority in the UK are in Cambridge and Newcastle. 

London has the highest salaries for both senior and mid-level positions. This is not surprising as London is the largest and most expensive city in the UK. The second highest salary for senior positions is found in Birmingham and the second highest salary for mid-level positions is found in Bristol.

(Source: Tech Nation, TalentUp, 2023)

The highest-paid tech business function is operational management, followed by product and sales. The lowest paid is administrative support, followed by finance.

(Source: Tech Nation, TalentUp, 2023)

Higher salaries are found in the finance, fintech and IT sectors; relatively speaking, the lowest are in travel and tourism

(Source: Tech Nation, TalentUp, 2023)

Salaries are slowly increasing. And they are expected to continue doing so. In the UK, all cities are around the average increase of 4%. 

(Source: Tech Nation, TalentUp, 2023)


Future people

Addressing current gaps in access to talent for UK startups and scaleups, and reducing inequalities in access to opportunity in tech for underrepresented groups as founders and employees could contribute up to $400bn in additional value to the UK tech ecosystem over the next decade - pushing us towards the $4tn target.

A comment from our report partner, Fragomen, describes the importance of getting talent right for UK tech, and approaching the challenge from a nuanced perspective:

It has been wonderful to see so many of those we have worked with celebrated and justifiably acknowledged in this year’s report for their work and contribution to the country they now call home, who we wish continued success to.

But a key standout of this year’s report is the further scale of opportunity for international talent from across the globe in the UK. With investment in 2022 topping $30bn, employment at an all time high of just under 5mn people, and talent gaps continuing to loom for UK tech firms, there is no doubt that top global tech talent will be essential to propel the ecosystem to future growth. As such, we concur with the assessment that the labour market, and talent gaps must be reimagined.

At Fragomen, we support not only individuals, but startups, scaleups and some of the world’s largest companies with all of their immigration needs. We operate locally in over 80 countries and offer our services across the world. 

No matter where you come from or what you do, Fragomen is here to support your ambitions to work in UK tech.


Stakeholder recommendations:

  • Given persistent underrepresentation in tech, founders need to invest in a culture of DEI from the outset, embedding it into the organisation’s DNA. In order to attract, retain and leverage the diverse talent available within the UK, startups and scaleups must understand that DEI is not merely a set of initiatives. Indeed, representation is unlikely to shift unless: employers and employees are held accountable, managers are trained on an ongoing basis, DEI becomes part of performance metrics (including promotion criteria), recruitment pools and hiring processes are audited and augmented to become more expansive, and an inclusive culture is created. Simultaneously, VCs and alternative funding bodies themselves must reckon with their own biases towards disproportionately funding white male founders, particularly when a lack of diverse thought can stifle potential innovation and growth. 
  • To combat a worrying trend of tech-clusivity particularly at senior level, founders need to get creative about what they look for in terms of experience when building their leadership teams (i.e. Do they need to have previously worked in tech? Do they need to have gone to Oxford and achieved a Masters?), and where they source talent from. In practice this means, looking beyond personal networks (which tend not to be diverse), researching exciting talent in the market, and being open to diversity of experience. 
  • The UK has an abundance of highly skilled individuals, and those with specialised skills are distinctly sought after. However, given the backdrop of the current economic climate, and due to a prevalence of short-term thinking amongst tech companies (created by a culture of ‘growth at all costs’ and an attitude of ‘hire quickly, fire quickly’), there are more highly skilled professionals than roles to fill. Startups and scaleups need to engage in strategic, sustainable long-term planning to a) continue to generate roles, and b) to avoid mass layoffs at a later date. In practice, this could look like start-ups exercising restraint as they build their teams by closely considering where their skills gaps lie, being thoughtful about how many hires need to be made at any given time, and avoiding over-hiring. This approach would signal a move away from the ‘boom and bust’ mentality, and ensure increased protection from unforeseen macro circumstances.


The end goal for many startups and scaleups is some form of exit event, where liquidity is flooded back into the ecosystem; to those people who founded, and grew the business, and to investors, who provided the financial capital for that growth. 

Scaleups in the UK have returned just over $583bn in value over the last ten years (2012-2022) - achieved by an exit of some form, whether an acquisition, SPAC or a public listing. The rate of return for investments made into UK tech companies in aggregate are robust, and on the face of things, look favourable to those in Europe and the United States. However, over the next decade, to return around the same rate of value to the ecosystem (just over 3.7x investment) UK tech firms will need to target exits of $2tn. 

This section explores performance over the last decade, seeking to understand the split between public and private market exits for UK tech scaleups, mechanisms for exiting, and differences across sectors and geographies.


Exit types

Scaleups in the UK have indicatively returned 3.7x investment over the last decade (2014-2023) - achieved by an exit of some form, whether an acquisition, SPAC or a public listing

(Source: Tech Nation, Dealroom, 2023)

All venture capital investment, irrespective of the round size, is extremely high risk. Across 10 investments in a typical fund: seven investments will not return the money which an investor put in; two will return the money that was invested; and (hopefully) one will generate sizeable returns to counteract the performance of the other nine investments. This is where the 10x mentality comes from, as one investment needs to generate the 20-30% internal rate of return which is expected of the fund. Moreover all the risk related to the follow-on capital which may need to be invested and working towards an exit is faced by the VCs. The founders and senior leaders of startups and scaleups are not bearing this risk as they are focused on building the technology and growing the business. 

In the UK, sectors like fintech have performed particularly strongly in terms of investment returns (5x over the last decade); healthtech (2.4x) and deeptech (2x) show slightly lower returns, but nevertheless have contributed significantly to ecosystem growth.

The ultimate risk of investments of the bottom end and top end of investment round values is not dissimilar, and likely both present a higher risk than the middle segment of investment rounds. The bottom end, pre-seed and seed investment rounds, are unvalidated businesses; they are still trying to establish whether or not they have product-market fit and their technology is still very much at an early stage of development. Consequently, a significant number of startups and scaleups at this stage fail, and investors are only willing to invest small amounts of money (<$4m) until key technological and business related milestones are hit. Beyond this point, a higher value of investment is met with a lower respective risk level.

At the top end of investment rounds by value, companies present a similar level of risk for completely different reasons. Firstly, a psychological one, as it is a much larger amount of money there is much more to lose. Secondly, achieving the megascale required to get the returns required, which includes expanding into new markets, is much more difficult and uncertain. 

A key determinant of world leading tech economies, setting them above the rest, is their ability to create the conditions for growth where companies at both the bottom and top end of investment can thrive, and ultimately, go on to achieve an exit, providing liquidity to the market.

Just under 6% of all UK tech companies have achieved an exit, whether through an IPO, SPAC, SPAC IPO or acquisition - 0.12% of all tech companies achieved a high value exit of over $100m

(Source: Tech Nation, Dealroom, 2023)

The journey from a company's foundation to exit can be a difficult one. As can be seen above, very few firms even reach that point (just under 6%), and even fewer are able to deliver high value realisations over $100m. Arguably, to see further ecosystem success, and capitalise on spillovers of talent, capital and leadership recycling through UK tech firms, more exits are required - and as many entrepreneurs suggest, tech companies must scale fast, or die.

Case study

Practical tips for exit preparation

Kindrik Partners

Tip 1 – assume you will exit in a private sale

The most common exit event for tech companies is a private sale to a trade buyer or, depending on how buoyant capital markets are, to a private equity or similar buyer.  IPOs provide exit opportunities as well, but for most NZ tech companies a listing will simply be a staging post to an eventual acquisition by a trade buyer (at that stage, probably via a takeover offer rather than an Agreement for Sale and Purchase).

For this reason, our advice to tech companies is to build your company to make it as attractive as possible to a trade or private equity buyer.

Of course, the things that maximise value in a sale to a trade or private equity buyer are consistent with maximising value in an IPO.  There are usually some additional things that are needed in an IPO (for example a board with capital markets and accounting expertise, and often an accelerated growth plan).  However, building a company that is able to attract a high value trade sale is also likely to be core to the value achieved in an IPO.

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2021 was a record year for value realisation in UK tech with $111bn of exits, including Deliveroo, Cazoo, Oxford Nanopore, and Wise

(Source: Tech Nation, Dealroom, 2023)

Though, as with VC investment, the data can be noisy; with both the value and volume of exits varying considerably year on year. The record year in 2021 was driven by a handful of high value listings.

There were a few high return exits via an IPO in 2021, and a long tail of firms returning less than 2x investment. 

2022 was a record year for the number of exits - over 1,000 tech companies were acquired, or were listed, but at the lowest value per deal recorded.

(Source: Tech Nation, Dealroom, 2023)

A lower proportion of companies go on to IPO compared to acquisitions, but, a higher number realise very high values (over $1bn) compared to those acquired - 24 firms that are listed, compared to 17 acquired for over $1bn.

(Source: Tech Nation, Dealroom, 2023)

Last year, UK startups went public at their lowest levels in over a decade

(Source: Tech Nation, Dealroom, 2023)

With a flurry of public listings in 2021, the value of IPOs reached a high of $6.3bn.

(Source: Tech Nation, Dealroom, 2023)

For acquisitions, 2019 was a record year. Trends might suggest that acquisitions are becoming less salient for late stage exits among established UK tech firms.

(Source: Tech Nation, Dealroom, 2023)

Around 11% of UK tech companies are VC backed, and of those VC backed firms, just under 1% go on to be acquired for over $100m - which equates to under 0.1% of all tech companies.

(Source: Tech Nation, Dealroom, 2023)


Exit readiness

Preparing a startup or scaleup to be exit ready takes many forms; from people to finance, and organisational structure to ownership. This section of the report looks to experts to provide an overview of the key considerations to bear in mind through your exit journey.

Dan Glazer, Office Managing Partner at Wilson Sonsini, our report partner, outlines why this matters for UK tech.

Since the 2010 launch of the Tech City initiative, the UK tech ecosystem has started up, scaled up, and become a global powerhouse.  However, M&A/IPO exits by VC-backed UK tech companies – the driver of the money and talent flywheel that sustains multi-generational ecosystem growth – largely have been missing at scale.  Those exits must occur for the ecosystem to continue thriving. 

Over the past decade, fewer than ten VC-backed UK tech companies have been acquired at a unicorn valuation or undertaken a US IPO.  There have been successful unicorn tech IPOs on the London Stock Exchange, but whether the LSE can be an option at the scale of the US exchanges is unproven. A lack of focus on exiting with intentionality and realizing value for management, employees, and investors could undermine much of the past decade’s progress:

If UK companies do not have exits that result in substantial returns for investors, those investors will find it challenging to raise new funds from LPs

If there are fewer new funds, there will be less capital for quality UK tech companies

If fewer UK tech companies are funded, there will be fewer UK tech jobs available and fewer opportunities for UK innovation and entrepreneurship

This is not an abstract concern.  Just last month, Business Insider reported that UK/EU venture firms are finding it difficult to raise fresh capital from LPs due to unsatisfactory returns on previous investments; fund managers blamed a shortage of exit prospects.

There are a plethora of ecosystems competing for limited acquiror and investor capital – particularly throughout the US and Continental Europe – but if the UK tech ecosystem approaches value realization as aggressively and confidently as it has approached starting up and scaling up, the UK will continue to be a global center of innovation, capital, and entrepreneurship.

Dan Glazer, Wilson Sonsini


Future exits

Enabling high value exits, and providing augmented support to founders to realise value created by their companies could contribute up to $550bn in value to the UK tech ecosystem over the next decade - pushing us towards the $4tn target.

Recommendations in this section focus on the firm level interventions and changes that could be made to better position a startup or scaleup for exit success. Ultimately this will contribute to UK tech's value and strength over the next decade.

Stakeholder recommendations

  • In summary, prioritise value realisation; tech leaders in the UK must develop a Silicon Valley-like sense of exit intentionality, capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late stage growth.
  • From Stephen Millard, Notion Capital, keep three things simple: '1) Alignment - across the leadership team and the board. 2) Readiness - a well run business with, for example, an always on data room and a network of people a founder can call on when needed - bankers, lawyers, advisors and 3) Intentionality - identify your possible universe of buyers considering why they might buy you and how you would fit into their strategy and then set out to build long term relationships with them.'
  • From Alex Simpson, Mercia, get your house in order, and be prepared: '...Ensure that good governance is being enacted throughout the business, by having regular board meetings, good quality board packs and monthly management accounts. Making sure that the right people are sat around the Board table, including Chair, FD, NEDs where relevant. Also getting a lawyer to look over commercial and employment contracts, as well as the internal processes of the business (e.g. internal policies), can be a good way to identify issues and correct them ahead of an exit process, as much better to deal with them then rather than during due diligence in a transaction.'
  • From Dan Glazer, Wilson Sonsini, investors have a role to play here too: 'Many founders in the UK underestimate their investors’ need for an exit that results in substantial financial returns, and many investors in the UK underestimate the interest of the founders in seeking an exit that results in substantial financial returns for their investors.  This cannot be cured with contractual provisions.  It has to be motivated by creating founders that want to exit and incentivizing that behavior.  Investors should focus on creating upside opportunities for successful founders, and being clear about those expectations.  Many founders seem put off when investors start pushing an outcome without having previously discussed their need to exit sooner.  Communication and alignment is critical to success.'


In conclusion, UK tech is at an inflection point, with enormous opportunity ahead - if changes can be made to capture and retain value, taking us from our trajectory of $2.6tn ecosystem value by 2032, to $4tn.

Scaleups in the UK have returned just over $583bn in value over the last ten years (2014-2023) - achieved by an exit of some form, whether an acquisition, SPAC or a public listing.

At the current growth rate, the UK tech ecosystem will reach $2.6tn if the momentum gathered over the last decade is maintained. However, if better conditions for scaling can be created, the opportunity of UK tech is potentially much greater.

Headwinds and tailwinds 

There are tailwinds and the inevitable headwinds in reaching ‘target $4tn’ ecosystem value. Investors have started to pull back over the last six months amidst a slowdown in the broader economic trends. Investment in 2022 receded by 32% globally, and 28% in the UK. UK startups raised $30bn in 2022, which though 72% higher than the 2020 total, is down from the heights of 2021 when funding peaked globally.

In 2022, the UK tech ecosystem saw the lowest number of rounds in the past 5 years, over 1,200 less than 2021 levels. High value rounds equalling $250mn+ and low value rounds equalling less than $1mn (pre-seed) encountered the largest percentage falls (with pre-seed rounds falling by 41%). The total decrease in the number of rounds by 1,207 was driven by the sharp decline in pre-seed and seed rounds - a fall of 1,129 rounds. 

UK tech on global stage

The UK took back its position as the third largest tech ecosystem in the world for VC investment in 2022 (after falling behind India), though is likely to see increasing pressure from India, and emerging ecosystems like Indonesia and Mexico over the next five years. Against its European neighbours, the UK remains the dominant player with investment into startups and scaleups remaining greater than investment into France and Germany combined.

However, without the right conditions and support mechanisms in place, there is evidence to show that the UK risks being caught up. France, Italy and Sweden are the only countries to see positive investment growth after the record covid bounce back year of 2021 (compared to the UK which experienced its highest decrease in 5 years at 24.7%). France’s investment growth figures are particularly impressive; they are the only country to have experienced positive growth in every year over the past decade. This is stimulated in part by the government backed startup agency, La French Tech Mission, significant investment from Bpifrance, the country’s state bank and France 2030, the €54bn plan investment Plan aiming to sustainably transform the key sectors of their economy.

Unicorn winter

2022 saw a decline in the rate of unicorn creation ($1bn+ valuation companies) at 4% (10x slower than 2022-2021 at 41%) underpinned by a reduction in the number of new unicorn companies being founded year on year for the last 18 months.

On the other hand, future unicorn ($250mn - 800mn valued companies) numbers have risen with 45% growth from 2021 to 2022, suggesting that either the UK is effective at supporting companies to scale, but not to the high end of the value spectrum, or that there is a glut of unicorns to come, on the basis of many companies being well poised to gain value and breach the billion dollar mark. 

Spotlight on diversity

Some ethnic groups and women are still heavily underrepresented in UK tech. No European country achieves a proportion of 30% of women in the tech workforce and tech roles for women in the UK are paid nearly 2.5% on average less than their male counterparts. Edinburgh is the city with the most women in tech, followed by Newcastle and Cambridge. All three are above 30% vs UK’s average around 25% of the workforce. There are no roles in tech in the UK where by proportion of the workforce, or pay, there is gender parity.

The proportion of people from underrepresented ethnic groups working in tech has increased over the last five years, but by less than +2%, highlighting continued inequality of access to tech roles. 

What needs to be done to reach a $4tn ecosystem value

For the ‘target $4tn’ ecosystem value to become reality, it is vital that Government rhetoric for the UK to be a ‘forward facing technological and scientific superpower’ is now paired with policies and support mechanisms to match and for all ecosystem stakeholders to fuel conditions for growth.

In this context, the report has recommended the following actions to achieve the target. 

  • Plug patient capital into all stages of company growth (not just at early stages) to ensure UK companies have the resources to live up to the promise of creating a global science superpower. 15x investment in deeptech, and climate tech must be made by the end of the decade to stimulate and sustain growth.
  • Rethink talent gaps, and emphasise opening access to opportunities in tech for all people. Underrepresentation in tech is still rife. Organisations like Colorintech are making huge strides to make tech accessible and fair, and more must be done to support them, and underrepresented people.
  • Prioritise value realisation. Tech leaders in the UK must develop a Silicon Valley-like sense of exit intentionality, capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late stage growth. 

As a country, we have an opportunity to create the Tech Nation we wish to be. Let's make the change we need to see, and start by taking what action we can, now.




Dealroom data deals with venture capital investment and excludes debt, lending capital, grants, ICOs and other non-equity. Secondary rounds, buyouts, M&A and IPOs are also excluded. The data excludes biotech. Including biotech the UK and European investment data would make it much higher. Dealroom’s proprietary database and software aggregate data from multiple sources, including news flow aggregation and processing, web scraping and manual research. Data is verified and curated with an extensive manual process, augmented by data processing.

Office for National Statistics

To measure the total number of tech and tech-enabled jobs across the economy, we used data from the Office for National Statistics (ONS) Annual Population Survey (APS). This is a survey-based sample of the UK population – on individual people rather than businesses. To get UK-wide data on people working in tech jobs from the survey, we have to make sure that the sample of people reflects the broader UK population – so we have to use multipliers from the ONS.

But this kind of analysis does not measure the number of direct jobs created by digital tech companies. To understand the impact and benefits of digital tech we need to have reliable data not only on the number of tech jobs across the economy but also performance and productivity indicators for the sector itself.

To do this, we use official data from the ONS Business Structure Database (BSD), which we also use to look at the performance of tech companies. This methodology allows us to have refined data that can be relied upon as the most accurate count of direct jobs created by the digital tech companies across the country.

The numbers are quite different in some cases. This is because one analysis looks exclusively at people working for digital tech companies, while the other looks at people working in tech jobs across the economy.

Analysis is based on a comprehensive look at all UK businesses that are PAYE or VAT registered.This means that using BDS data will provide us not only with the number of direct jobs created by tech companies but also helps us understand the performance of these companies. Viewed together, the two sets of data will help us understand all people working in digital tech.

The data on digital tech companies also contains financial information, as well as employment. This means that we can have reliable data on productivity. To get a true picture of jobs in digital tech, we need to look at performance, as well as quantity of jobs – this cannot be obtained from the APS alone.

Talent Up

TalentUp offers data-driven insights into the talent market to help companies drive effective recruitment and retention strategies.

With TalentUp talent market data, companies can tailor their human resource strategies to discover exceptional talent, detect market opportunities and present better job offers.

TalentUp uses proprietary Big Data and AI technology to analyse millions of companies and professionals on social networks and websites. Their talent market data offers business leaders and HR professionals deep insights into the talent market, and offers guidance on what it takes to recruit the right candidate.