Coadec has published its first report examining Wales’ startup ecosystem. The report uses in-depth interviews with startups to explore their experiences starting and scaling startups in Wales and what institutional challenges they have faced.
The report concludes with eight recommendations.
The report identifies six central challenges for Welsh startups, including:
- Investment: Startups wanted access to more diverse investment routes. Founders were also concerned that public funds, such as the Development Bank of Wales, dominated the funding landscape.
- Connectivity: The Covid-19 pandemic normalised and accelerated trends towards more hybrid and remote working. Founders felt Wales’s startup ecosystem is well positioned to capitalise on this with beautiful landscapes and a low cost of living – as long as Wales improved connectivity including physical infrastructure and broadband.
- Isolation: Many founders said they were crying out for access to more hubs and coworking spaces to build networks and swap advice and experiences.
- Vision: Many founders felt the Welsh Government should provide more of a long-term tech vision. Founders felt that, in some cases, a laudable attempt to be equitable across Wales’ regions and sectors has meant resources are diverted from the areas where Wales has genuine opportunities to become national or global leaders. One stakeholder who was deeply embedded in the ecosystem and works regularly with the Welsh Government described its support as being, in their words, “faddy”.
- Talent: While Wales can be good at training homegrown talent, many founders identified brain-drain as a serious issue. In one conversation, a founder said retaining local talent had become so difficult that, when asked where Wales’ greatest opportunities lay, they remarked “Liverpool, Birmingham, Bristol.”
This report concludes with eight recommendations for the Welsh Government to develop targeted support to the startup ecosystem
- Broaden the entry requirements to Angels Invest Wales and more actively flag the network at home and abroad.
- Establish a programme that backs the creation of more venture builders.
- Commit to supporting and expanding regional co-investment funds.
- Launch a review into how Government funding can be leveraged to provide better engagement with startups.
- Invest in new coworking spaces that can act as hubs for startups to access advice and guidance.
- Consider how to further leverage enabling remote working as a draw for more startups to base themselves in Wales.
- Launch a review into the state of Welsh university spinouts, considering how to better support the commercialisation of Welsh research.
- Create more trade envoys that champion specific Welsh tech sectors and review the current Business Diaspora Strategy to better promote tech startups.
Dom Hallas, Executive Director of Coadec, said:
“Across the UK we're seeing local ecosystems thrive – nowhere is this as true as Wales where we have local leaders working hand in hand with local founders to build great businesses. But there's more to be done and we hope that our new report can provide some insights from founders on how to do it. This is not the end of the conversation but what we hope is a valuable opening salvo.”
Mark John, Managing Director and Co- founder of Tramshed Tech, said:
“Despite the current, extremely challenging financial climate, Welsh innovation has shown itself to be remarkably resilient. And it is so important that we keep up this momentum that we have created, as the innovative approach of tech startups plays an ever-increasing role across the economy and society as a whole – moving technology from a vertical sector to a multi-sector horizontal, operating across a range of markets and offering benefits to previously ring-fenced sectors.”
Elis Thomas, Wales Policy Analyst at Coadec, said:
“This is a snapshot of an ecosystem in flux: the founders I spoke to would all tell you that Wales is a fantastic place to start a tech company, but we have some catching up to do if we are to fulfil our true potential. This report explores the landscape of Wales’s diverse tech ecosystem, reflecting on where founders see our strengths and barriers to overcome, as well as setting out where we think the ecosystem should go next.”
