Cambridge is the top city in the UK for technology outside of London, according to analysis by the UK’s Digital Economy Council.

The city narrowly beat Manchester due to a combination of high levels of venture capital (VC) funding, VC rounds, advertised tech salaries, the number of unicorns - tech companies worth more than $1 billion - and “futurecorns”, companies predicted to hit that valuation in the future.

Oxford, Edinburgh, and Bristol came in third, fourth, and fifth place respectively in the ranking of cities outside of London.

More money than ever is flowing into UK tech according to the organisation’s analysis, £29.4 billion was invested this year, over double last year’s figure of £11.5 billion.

This is the highest year-on-year growth since 2013 to 2014 according to the analysis when it grew from £1.5 billion to £3.5 billion.

The organisation also found that almost £9 billion of all VC invested went into start-ups and scaleups outside London and the Southeast.

The combined value of UK tech companies founded since 2000 is now £540 billion according to the data.

The £29.4 billion raised by UK start-ups and scale-ups was double the figure raised in Germany - £14.7 billion- and almost three times that raised by French companies, £9.7 billion. UK tech investment accounted for a third of the total £89.5 billion that flowed into the European tech ecosystem this year.

UK venture capital firms have also had a record year according to the analysis, raising £7 billion.

The organisation found that most of the money coming into UK tech is from the US, with 37 per cent of all funding coming from the US, up from 31.5 per cent last year, with the majority of it going into FinTech and HealthTech companies. Over 28 per cent of UK venture funding came from domestic capital.

The UK was also successful at creating unicorns during 2021 according to the analysis, 29 were created this year including the e-commerce platform Depop, car selling platform Motorway, InsurTech Marshmallow, and Starling Bank.

This takes the UK’s total unicorn figure to 115, meaning 25 per cent of the UK’s total unicorns were created in 2021 alone.

The organisation found that 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.

“With such a record tech investment year, it’s becoming increasingly evident that the UK is very good at rearing and cultivating start-ups and scale-ups into successful global companies right across the UK, unlike its continental European neighbours, where it tends to be more in capital cities,” said Gerard Grech, founding chief executive at Tech Nation. “A true network of digital excellence is emerging right across the country through entrepreneurship, driving new job and wealth creation.”

He added: “Tech Nation is committed to identifying and fueling the growth of these high-potential businesses through its programs and initiatives, removing geographic and financial barriers as quickly as possible.”

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