Analysis of Venture Funding in Birmingham Tech Companies

This analysis was produced by our COO, Jay Ashcroft, using the data source ‘Tech Nation Data Commons 2020′.


  • The dataset is for disclosed investments only
  • Where a round has multiple investors and individual contributions are undisclosed, the total investment has been split equally between investors
  • Universities have been omitted from the investor section as they typically invest small amounts and don’t manage a significant investment fund


Section 1: Funding In Context

Benchmarking Summary

Benchmarking Birmingham against similar cities provides a greater measure of progress. Through the analysis, 3 tiers of maturity can be identified:


Mature in a number of tech sectors. Extensive ecosystem: London


Mature in a few tech sectors. Specialised ecosystem: Cambridge, Oxford, Bristol & Manchester


Developing in a few sectors. Emerging ecosystem: Leeds, Newcastle, Brighton, Nottingham, Birmingham, Leicester, Sheffield, Liverpool

Midlands Engine vs Northern Powerhouse

Manchester is a greater magnet for investment by a significant margin than other Northern cities. The Midlands is closely split, and one city could stand to significantly benefit if they were to pull away.

Summary of Birmingham Funding

The tech scene is in the middle of the emerging pack, with close competition from a number of cities.

Most sensible to benchmark performance against Newcastle and Leeds, both upper emerging ecosystems. 

Large gap to Manchester which has received 7.5x more investment in the same period.

Section 2: Growth of Investments

Pre-Covid, Birmingham was performing above the national average: 123% growth vs 63% nationally.

Since Covid, Birmingham is performing below the national average: -56% growth vs 1% nationally.

Leeds and Newcastle are experiencing high growth in comparison to Birmingham.

Annual Growth

Investment in Leeds and Newcastle comes in cascading, huge waves every 24 months. Birmingham is steadier, but growing at a much slower rate.

Summary of Birmingham Investments

Birmingham has been growing steadily and climbing up the investment table year on year.

Covid has stalled tech investment in Birmingham but not Leeds or Newcastle. Interestingly, Leicester and Nottingham are also experiencing significant investment declines, suggesting the Midlands as a whole is struggling.

Leeds and Newcastle have a different investment cycle and see a significant jump every 24 months. This is likely the result of scaling companies raising large amounts.

Section 3: Investment Opportunities

Investment Opportunities Summary

All 3 cities are experiencing a decline in the number of rounds per year.

The average investment per round has grown in Leeds and Newcastle but declined in Birmingham. This indicates investment shifting towards early-stage companies in Birmingham.

From 2020, Birmingham has suffered a significant drop in investment while Leeds and Newcastle have experienced record investment.

Section 4: Investment By Stage

Summary of Investment by Stage

Birmingham has a challenge in getting companies beyond Seed stage. 70% of all investment rounds are Seed rounds.

Birmingham has yet to produce a Series B company. Tonik Energy, holder of the largest single Series A round, recently went bust.

Leeds and Newcastle have produced 1 Series B company each in 2020.

Section 5: Investment by Sector

Summary of Investment by Sector

Although Birmingham has recieved the most Fintech investment, there is no region that is dominant in this sector which represents an opportunity.

Birmingham hasn’t yet developed a ‘specialisation’ with investment spread similarly across 4 sectors.

Leeds strong in HealthTech and Enterprise. Newcastle strong in MarTech and Enterprise.

Leeds and Newcastle seeing investment clustered into 2-3 sectors which suggests a maturing of companies, skills and expertise.

Section 6: Investors

Leeds had the fewest investors involved through the period (22), but averaged the highest investment per investor (£4.9m).

Newcastle benefits from a large number of investors (72) who contribute smaller amounts (£2.3m).

Birmingham has a strong number of active investors, who are primarily investing at Seed / Early VC stage.

Summary of Investors

Although Birmingham has recieved the most Fintech investment, there is no region that is dominant in this sector which represents an opportunity.

Birmingham companies are significantly more reliant on investors based within the city than Leeds or Newcastle are.

41% of all rounds go to local investors in Birmingham vs 30% in Newcastle and 18% in Leeds.

Birmingham has an even greater reliance on pounds invested coming from within the city. 29% of all finance raised in Birmingham is already based within the city vs 8% in Newcastle and 5% in Leeds.

Section 7: Summary

A successful tech ecosystem is a culmination of financial, human and social capital which creates a compounding effect on economic growth. This analysis highlights 3 elements that suggests Birmingham has key barriers in each area to unlocking compounding tech growth:


Financial: Heavier reliance on local investors means less total investment available and a more localised focus.


Human: Few companies raising beyond Seed stage (either by choice or through going bust). This creates a lack of 2nd generation successful entrepreneurs in the ecosystem who can share learnings from the journey.


Social: No tech ‘specialisation,’ with funding split across multiple sectors in small amounts. This reduces network effects and depth of expertise in the city.