Edinburgh and Glasgow placed in the top five UK cities for private equity startup funding rounds between Q1 and Q3 of 2024, according to the Global Investment Report 2024 published by sharetech platform Vestd.
However, the two largest cities of Scotland and the regional cities of England are still a long way behind London in securing funding rounds.
The report said investment in early-stage UK businesses has dipped, with funding rounds down 28%.
“London had a total of 1,230 funding rounds that occurred between Q1 and Q3 of this year, with 474 funding rounds in Q1 alone, although activity slowed in the following quarters,” said the Vestd report.
“Manchester ranked second, with 72 funding rounds in total. However, the city observed the smallest decline year-on-year with a 6.5% dip, nearly matching its performance from the previous year.
“Elsewhere, Edinburgh, Bristol, and Glasgow rounded out the top five, with 65, 50, and 45 funding rounds respectively, in the year to date.
“Liverpool, on the other hand, had a 70.6% rise in funding rounds, far outpacing its 2023 total funding activity by the end of Q3 2024.
“Sheffield closed out the top 10 with 17 funding rounds in total. While it had a strong performance in Q1, it had observed a 42% decline in funding activity by the end of Q3.
“However, with only 27 funding rounds in total for 2023, the city could still be on track to surpass this by the end of quarter four (Q4).
“While traditionally not seen as major investment hubs, these cities are beginning to capture a larger share of the overall funding pool, which may suggest a growing pattern of diversification in investment across the UK.
“As the investment landscape develops, regions with emerging innovation clusters particularly in sectors like tech and sustainable technologies, may become increasingly attractive to investors.”
Vestd analysed Crunchbase data to reveal private equity trends across a range of regions and industries.
“In the first half of 2024, data revealed that a record number of UK companies were launched with 468,000 new firms, bringing the total number of companies operating in the UK to 5.47 million,” said the Vestd report.
“Despite this, our latest research revealed that investment in early-stage businesses has dipped. Funding rounds were down by over 28%, with 2,369 total funding rounds for the year to date compared to the 3,314 recorded last year.
“While across the UK Q1 of 2024 saw a promising start with 901 total funding rounds, this had since declined by 26.3% by the end of Q3.
“Historically, funding has been concentrated in London, and 2024 was no exception. The (UK) Capital had the strongest performance across the UK despite observing a 30.4% decline compared to the previous year.”