Cardiff is one of the UK’s fastest-growing tech cities thanks to its combination of high levels of VC funding, available tech job opportunities, advertised tech salaries, number of high-growth tech companies and future high-growth companies, according to new analysis for the UK’s Digital Economy Council by Dealroom and the smarter job search engine Adzuna.
Startups in the city have raised £39 million this year, with 13 venture capital rounds taking place in Cardiff this year. Cardiff is also home to one futurecorn, a high-growth tech company predicted to be worth $1 billion in valuation in the next few years, in the form of fintech platform Sonovate, which provides finance and tech solutions to recruitment agencies and other businesses to engage contractors and freelancers.
The new tech investment flowing into Cardiff has seen companies across the city increase their tech hiring. There are now 601 IT vacancies available in Cardiff, an increase of 81.6% from 2020’s figures. This demand has seen average advertised salaries rise too – from £41,505 last year to £49,612 in 2021, an increase of 19.5%.
Digital Minister Chris Philp said:
“Wales is a tech hotspot and it's great to see Cardiff named in the top ten regional UK cities for the amount of capital raised. The success is testament to the talent and ingenuity of those working in the city's tech sector.
“We are determined to capitalise on this golden age of UK tech and level up the country with investment in skills and pro-innovation policies to drive growth and create jobs.”
Levelling Up Power Tech League 2021:
With more money than ever flowing into UK tech – £26 billion this year, up 2.3x from last year’s figures of £11.5 billion – regional cities are taking a bigger slice of the pie. Around £9 billion of all total funding went to startups and scaleups outside of London, indicating that world-class tech companies are being built across the UK every day.
Record investment in UK tech
This regional growth took place against the backdrop of an incredible year for the UK tech industry. Tech investment grew 2.3x this year, the highest growth since 2013 to 2014 when it grew from $2 billion to $4.6 billion.
UK tech captured more than a third of investment into Europe
The £26bn raised by UK startups and scale-ups was nearly double the figure raised in Germany (£13.5 million) and is more than three times that raised by France companies (£8.6 billion). UK tech investment made up 35% of the total £76 billion that flowed into the European tech ecosystem this year.
UK venture capital firms have also had a record year and raised £7 billion with record-breaking rounds from London firms including Index Ventures, Balderton Capital, 83North and Eight Road Ventures.
More US investment
The majority of the money coming into UK tech is from the US, with 38.2% of all funding coming from the States, up from 31.5% last year, with the majority of it going into fintech and health tech companies. Over 28% of UK venture funding came from domestic capital. Competition for deals among VC funds is heating up as more US venture funds launch offices in the UK, including General Catalyst, Lightspeed Venture Partners and Sequoia.
More unicorns created than ever before + more than France and Germany combined
More funding means more unicorns, with 29 created this year including the e-commerce platform Depop, payments platform GoCardless, car selling platform Motorway, insurance disrupter Marshmallow, and the challenger bank Starling Bank. This takes the UK's total unicorn figure to 116 meaning 25% of the UK’s total unicorns were created in 2021 alone. The UK has more unicorns than France (31) and Germany (56) combined.
30% of new unicorns created this year are outside of London
Nine out of the 29 unicorns created this year are outside of London including Interactive Investor in Glasgow, Vertical Aerospace in Bristol and Touchlight Genetics in Hampton. Of all the unicorns created in the UK, 35% are outside of London and 35% of futurecorns are also based outside of the capital.
More job opportunities in London and outside
The increased levels of money going into UK tech also mean companies are in need of trained technical and business staff. There has been a 50% rise in overall UK tech job vacancies advertised this year compared to 2020’s figures, with advertised tech vacancies hitting 160,887 in November. Currently, tech vacancies make up 12% of all available jobs in the UK, with just over 50% of these jobs available outside of London and the South East.
Software developers are still the most in-demand tech job across the UK. These positions make up 9% of all tech jobs with prospective developers being offered an average salary of £64,318, a 12% increase on 2020’s figures. Specialist staff such as java developers and IT systems architects continue to be able to command high salaries with the average advertised wage for these roles being £80,076 and £93,004 respectively.
Remote jobs spread tech success
The UK tech industry continues to lead the way when it comes to hiring practices since technical jobs are well positioned to be carried out remotely. In fact, 21.6% of all job ads in the IT sector are advertised as remote roles. This is also contributing to the spread of the UK tech ecosystem beyond London as businesses can hire across the country and find the staff that they need, regardless of location.
Increase in R&D
The government has increased its investment in R&D this year to £20bn by 2024-25, in order to support the UK’s research institutions, universities and businesses with an aim to increase this to £22bn by 2026-27. This investment is aimed at securing the UK’s future as a global science superpower, supporting businesses as they transition to becoming more innovative and productive and creating highly skilled jobs across the country. At the same time, there has been increased private investment in deep tech firms, totalling £6.2bn in 2021, up from £2.8bn in 2020. One of the biggest deep tech deals of the year was the £396m Series D raise by AI drug discovery company Exscientia, of Oxford, which helped the company achieve unicorn status.
Saul Klein, partner and co-founder at LocalGlobe, said:
“It’s taken 20 years for UK tech to get to the starting line and things start to get interesting in the next 20 years. We have all the ingredients to become the leading tech ecosystem in the world, with record levels of R&D, financing and established tech hubs across the country from New Palo Alto in Kings Cross, to Cambridge, Edinburgh and Manchester. But the key differentiator for investors in future will be a willingness to take an ethical approach to building businesses. We can be world-class in this and over the long term this will set our companies apart from those built in the US and China.”
Yoram Wijngaarde, founder and CEO at Dealroom, said:
“The UK tech ecosystem has exploded in the past year, with an increasing number of mega rounds minting new unicorns and futurecorns every day. This is significant because we know from research that employees at $1b+ companies often go on to found their own startups, some of which become unicorns themselves, which helps to shore up the ecosystem and lead to a new generation of global companies.”
Andrew Hunter, co-founder at Adzuna, said:
“The growth of tech companies across the UK has led to a surge in hiring across the country. The number of IT job openings is higher than its ever been and is consistently growing week on week. In particular, it’s great to see strong hiring in cities like Manchester and Birmingham which are showcasing some of the highest figures outside of London. The struggle for businesses across the country is having enough skilled staff to fill these positions to allow them to keep growing.”