Is the South-West region of the UK the next Silicon Valley?
With Brexit on the horizon, UK-based start-up companies promise to play an important role in driving the future economy. The South West is home to more than 10,000 tech companies and in Bristol, the tech sector forms the fastest-growing part of the economy.
Why the South-West?
The South-West region of the UK has capitalised on the importance of technology by providing the necessary eco-system designed to nurture, develop and accelerate start-ups specialising in technology. Aside from the excellent level of support harnessing and building start ups, there are a couple of other reasons as to why the South-West has been able to be as successful as it is.
- Education — The likes of University of Bristol, Bath, Exeter, Southampton and Surrey offer world leading computer science degrees and partner with a number of Labs to propel innovation
- Hubs — The quality and quantity of support surrounding students facilitates the growth of ideas into impressive businesses
- Location — Being only an hour away from London has its perks. With rent half the price of London prices and train links to majority of the UK, it’s a lucrative place to live
- Cluster — The focus on tech has built a community where ideas can develop. Having the support system to assist like minded individuals is a recipe for success
As well as this, the region is home to some of the biggest Tech firms in the UK. The likes of Nokia, Vodafone, Amazon, Sony and BT all with operations based in the region. This drives a demand for the solutions to some of companies biggest problems and produces a tech-first mindset that propels tech-orientated business ideas.
“Bristol is Booming”
Bristol is one of the leading tech clusters innovating in robotics, AI and autonomous vehicles through partnerships with the University of Bristol and tech labs across the city. It is home to two billion-dollar tech unicorns. The city has a host of remarkable incubators, labs and tech co-working spaces. Most notably:
- SET squared
- Unit DX
- Launch Space
- Future Space
- NatWest Entrepreneur Accelerator
- Runway East (co-working)
- Origin (co-working)
The cities tech businesses achieved a combined turnover of $7.9billion and employed roughly 25,000 people.
Top companies currently based in Bristol include:
- Open Bionics— a robotics company creating affordable 3D-printed bionic hands for amputees, researchers and makers. Founded in 2014 by Joel Gibbard and Samantha Payne, Open Bionics has raised $2.9m so far
- FiveAI— a Bristol and Cambridge start-up that uses AI and machine learning to help accelerate the development of autonomous vehicles and public transport, and ensure that autonomous vehicles can safely and accurately navigate in complex environments, especially urban areas. FiveAI has raised $37.7m in funding so far, including a $35m Series A round led by Lakestar in September 2018.
- Xmos — makes voice capture solutions for automated speech-recognition systems and its technology features in products such as the Amazon Echo. Xmos is backed by some of the largest names in high-tech venture capital, including Amadeus Capital Partners, DFJ Esprit, Foundation Capital and Robert Bosch Venture Capital.
- Scribeless— has built Artificial Intelligence handwriting-learning algorithms can learn any individual’s handwriting to an indiscernible level, allowing anyone to sign in to their platform and send handwriting letters at scale in minutes. The round was led by venture investor RLC Ventures to position Scribeless as the leading personalisation handwriting tool across Europe and the US. Ascension Ventures, SuperSeed and a number of strategic angel investors also participated in the seed round.
- Ultrahaptics— is developing a system that uses ultrasound technology to project the sense of touch onto a user’s skin. It has raised £28.6m in funding so far, including a £17.9m Series B round that includes IP Group, Woodford Investment Management and Cornes.
Even Sequoia Capital is dipping its toes!
Sequoia has invested $50m in Bristol based AI start-up Graphcore. Nigel Toon, CEO of Graphcore has said Sequoia was a suitable fit for his company, because of its understanding of the importance of machine learning
The alignment in goals by both Graphcore and Sequoia have led to the partnership. Toon has said that ““We’re not obsessed with raising money, we’re obsessed with who we work with and Sequoia has a deep understanding of what it takes to scale and build a successful business.”
This isn’t the first time a big Venture Capital firm has entered the South-West region and with the eco-system currently in place, it certainly won’t be the last time.
Statistics for the South-West region provided by TechNation:
VC yearly investment in the South-West UK region
We see a yearly increase of roughly 30% year on year… who knows what 2020 has in store for the region!
If you’re a VC/Angel Investor and haven’t considered exposure to the region yet, maybe it’s time you do.