UK tech firm numbers double in two years – with London start-up growth lower than nearly all other regions
The number of newly-created UK tech firms is up by a fifth, with London marginally below the national average.
There were 46,474 new tech companies created in Britain in 2022, up from 38,240 in 2021.
Based on data from Companies House, the uptick in registrations of new firms is almost double that of 2020, when the Covid pandemic slowed numbers to 23,531.
The strongest growth was seen in the east midlands, which was 38 per cent up on last year, followed by the east of England, up a quarter.
London had a 21 per cent increase, with almost 25,000 new companies being created, but this was down one per cent on the national average. Other major success stories were in the north and south west, at 29 and 28 per cent respectively, while Yorkshire was up 30 per cent.
Ben Bilsland, a partner and analyst at audit, tax and consulting firm RSM UK, said “whilst it is no surprise to see London at the centre of new tech incorporations, growth across all regions outside the capital is further evidence of the UK’s thriving tech industry.
“This crop of early-stage businesses will need support to scale. Access to funding will be crucial and the UK government will need to ensure that UK tech is an attractive place for both domestic and overseas investment.
“For many young innovative companies, R&D tax incentives are crucial cash inflows. For many, the recent changes to UK R&D schemes that reduced the amounts small companies can claim were not seen as a positive step towards supporting the early-stage ecosystem.
“Innovation requires a world-class talent pool and UK tech will look to both education and immigration to build their workforces. Support from our universities and schools to build skills in STEM subjects and emergent areas such as Artificial Intelligence will be essential. Clarity over immigration policy will be required to ensure a healthy inflow of tech talent to fuel growing companies.”
This comes after tech investors warned of a growing ‘valley of death’ funding gap facing the UK’s tech sector.
Investors said the issue could scupper the government’s Silicon Valley ambitions as firms struggle to raise cash and fuel growth.
Venture capital funding into the UK faltered last year amid a global slowdown as soaring inflation and market volatility caused investors to pull back from dealmaking.
Data from fintech industry body Innovate Finance last month highlighted an investment “polarisation” in the UK as late stage and seed stage jumped upwards, while funding for early growth stage rounds plunged 38 per cent to $1.7bn and later stage deals fell 16 per cent to $7.1bn.