In recent years, the tech industry has seen its fair share of upheavals and transitions. While 2023 marked a downturn, the subsequent year heralded a period of recovery. Despite job losses, a surge in global investment in start-ups by 5 percent, driven largely by advancements in artificial intelligence, served as a beacon of hope.
However, this revival has not been uniform across the globe. The UK, Europe’s biggest tech market, experienced a dip in venture capital investment in 2024 compared to the previous year, dropping to around $15 billion from $20 billion. This anomaly, as described by Conor Moore, global head of private enterprise at KPMG, can be attributed to a phenomenon of “mega deals” in other regions, particularly the US, which siphoned off significant funds.
Despite this setback, Moore remains optimistic about the UK’s investment landscape for start-ups. It is essential to recognize that the decline in investment is not a true reflection of the UK’s potential but rather a consequence of the exuberance in AI investment in other jurisdictions. This decline is mirrored in some other European countries, but there are still many reasons to be hopeful about the funding environment in the UK.
Support and Infrastructure for UK Start-ups:
1. Diverse Hubs: The UK boasts a diverse array of start-up hubs, each offering a unique mix of facilities, resources, and support networks for budding companies to flourish.
– Accelerators and Incubators: These hubs provide intensive programs to prepare start-ups for investment or nurture them over a couple of years, fostering growth and development.
– Founders Factory: This prominent hub topped the UK and Ireland rankings for 2025 and is number five in Europe, providing crucial support in product development, technology, legal matters, marketing, and investment facilitation for early-stage start-ups.
Connections and Partnerships:
1. Connecting Start-ups: Start-up hubs play a pivotal role in connecting budding companies with the right investors, partners, and expertise required for growth.
– Tembo Money: An example of successful collaboration between a start-up and a hub, where corporate partners such as Aviva not only invested in the start-up but also contributed to its growth and success.
– Cross-Pollination: The experience of serial entrepreneurs transitioning to run start-up hubs, as seen in the transformation of Dana from a CFO at Founders Factory to CEO and co-founder of Tembo Money.
Importance of Entrepreneur-Led Hubs:
1. Entrepreneurial Leadership: The success of start-up hubs often hinges on being led by entrepreneurs who offer deep connections to investors and talent, providing a conducive environment for start-ups to thrive.
– Dogpatch Labs: Ranked high in the FT’s hub list, the Dublin-based hub supports start-ups from inception to establishment, fostering a strong entrepreneurial community and facilitating connections with investors.
The Imperative of Concentrated Tech Clusters:
1. Regional Hubs: To maintain its position as a tech start-up leader, the UK must consolidate its tech hubs into regional clusters that can produce world-class “unicorns.”
– Northern Gritstone’s Vision: Duncan Johnson advocates for the consolidation of tech clusters in specific regions such as north-west England, Bristol, Strathclyde, London, and Oxford-Cambridge to drive innovation and create a stronger gravitational pull for investment.
As the tech landscape evolves, the role of start-up hubs in nurturing innovation and fostering growth remains indispensable. By fostering connections, providing essential support, and driving collaboration, these hubs serve as integral pillars in the journey of aspiring start-ups towards success in the ever-changing tech industry.
