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January 2024

Key players

Startups to watch

The following early-stage startups were named by regional tech stakeholders for their high-growth potential. Selected startups were each nominated by at least two different, independent stakeholders.

Click on startup logos to reveal more information.

County Durham

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HQ: Durham | Founded: 2022 | Funding: Bootstrapped | Subsector: AI / Media

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AI-powered media startup analyses video and audio to do ‘laborious’ video editing work – enabling creators to automatically generate social media clips. Choppity featured in Business Insider’s ‘6 AI tools podcasters use’.

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HQ: Seaham | Founded: 2019 | Funding £1.9m | Subsector: Climate tech

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Climate tech startup spun out of Durham University develops low-carbon and carbon-negative construction materials, including OSTO, a material used for low-carbon concrete production. The product was a finalist in the Earthshot Prize.

Tees Valley

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HQ: Middlesbrough | Founded: 2022 | Funding: Bootstrapped | Subsector: Gaming

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Video game development studio that also uses game engine software to craft TV graphics, 3D art and game prototyping. Dink has worked on projects with the BBC and won ‘best new creative business’ at Tees Tech Awards.

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HQ: Stockton-on-Tees | Founded: 2021 | Funding: Bootstrapped | Subsector: AI / Maritime

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Award-winning data science company that helps transport operators improve efficiency, with a focus on maritime and logistics. SeerBI also provides AI discovery consultancy and partners with global tech companies to build a data and AI lab for industry.

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HQ: Stockton-on-Tees | Founded: 2019 | Funding: Bootstrapped | Subsector: Cybersecurity

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Cybersecurity company tackles emerging security issues with innovative and agile solutions. Sencode was set up by three Teeside University students and has been supported by Tees Valley programs.

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HQ: Stockton-on-Tees | Founded: 2021 | Funding: Pre-funding | Subsector: Knowledge transfer software

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Knowledge marketplace delivering trustworthy expertise to support business growth, set up by North East tech leader David Dixon. Fireside won best tech startup at the 2023 Tees Tech Awards, before going to market.

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HQ: Skelton-in-Cleveland | Founded: 2019 | Funding: Not known Bootstrapped | Subsector: Personal app

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Community interest company provides a ‘super app’ to enable users to curate personal memories and build positive connections with others. It has partnered with Teesside Hospice to promote digital inclusion and virtual legacies among hospice patients.

Newcastle

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HQ: Newcastle | Founded: 2020 | Funding: £1.75m | Subsector: Maritime

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Maritime startup providing predictive analytics to reduce inefficiencies and risks in the industry. In 2023 it raised £1.5m in a round led by Howden Ventures.

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HQ: Newcastle | Founded: 2020 | Funding: Acquired | Subsector: Gaming

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Gaming company providing a digital operating system for online racing communities, including livery designs, broadcast functionality and virtual commentators. Grid Finder provided community management tools for the Formula E Accelerate esport series.
Grid Finder announced its acquisition by US motorsports group RAFA Racing Club in January 2024.

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HQ: Newcastle | Founded: 2021 | Funding: Not known | Subsector: Marketing tech

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Automated reporting for marketing which integrates with other enterprise software and provides financial and analysis support.

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HQ: Newcastle | Founded: 2020 | Funding: Not known | Subsector: Biotech

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Biotech company develops and commercialises technology for collecting exhaled breath samples as part of its aim to create a platform for disease and environmental diagnostics. It has won several pitching and startup awards.

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HQ: Newcastle | Founded 2022 | Funding: £190k | Subsector: Manufacturing

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Launched a year ago, SQCDP currently works with North East manufacturing companies to replace factory paperwork with a mobile app. The startup participated in Ignite’s pre-accelerator and the Royal Academy of Engineering’s accelerator, and is currently raising a £500k pre-seed round.

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HQ: Newcastle | Founded: 2019 | Funding: £75k | Subsector: Social commerce

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Self-service ecommerce platform built for social media sales. Sugarcoat has been selected for a number of accelerator programmes and pitching opportunities.

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HQ: Newcastle | Founded: 2023 | Funding: Bootstrapped | Subsector: Tech for good

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Online tool specifically for young people in care and their guardians to store photos, memories and key information to help them understand their life story and identity. Managing director Christian Brock has stated his aim that as the company grows, more than half of employees will be adults with direct experience of the care system.

Sunderland

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HQ: Sunderland | Founded: 2020 | Funding: Grants | Subsector: Engineering

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Civil engineering startup specialises in bespoke analytics for remote surveys using drones and underwater remote vehicles to collect data, and AI to analyse. The company has won a transport and research innovation grant and has been shortlisted for awards.

Company spotlights

Atom Bank

Founded in 2014 by Anthony Thomson and Mark Mullen, the Durham-based challenger bank was the first digital-only bank in the UK to launch without any branches, and the first of its kind to receive a full regulatory licence from the Financial Conduct Authority, in 2015.

Just a year after it was founded, Atom Bank announced it would set up its headquarters in Durham following “a detailed search across North East England to find the best location for the launch and growth of the business”.

Atom has raised more than £600m across multiple funding rounds, including £100m in November 2023 from existing investors BBVA, Toscafund and Infinity Investment Partners. Mullen, who is CEO, had previously said that an IPO was on the cards in 2024 or 2025.

The fintech has doubled down on its roots in the city of Durham, while offering remote working and a four-day working week. With more than 400 employees based in Durham, the company is reportedly moving offices; its previous base at Rivergreen Centre was sold to the council to develop an innovation centre.

Atom has repeatedly partnered on initiatives to build tech skills in the North East, including funding ‘Women in Tech’ scholarships at Durham University, developing a new STEM-focused sixth-form college - Durham Maths School - to help address the digital skills gap, and collaborating on a STEM diversity and inclusion initiative, Northern Power Diversity Matters.

Robbie Steel, head of PR and communications at Atom Bank told UKTN: “Atom bank has grown strongly and sustainably, recording its first annual operating profit following a year of enormous growth in 2023.

“Operating with a team of over 500 people, the bank is proudly based in Durham, and strives to champion the North East as a great place to live, learn and work. We are actively connected to the local community, and are passionate about addressing the critical digital skills gap and helping develop young people and other groups that are under-represented within the fintech industry.”

Double Eleven

Games developer Double Eleven has become one of the largest games publishers and developers in the UK since it was set up in 2009.

The studio employs more than 400 people with headquarters in Middlesbrough, Teesside and an office in Kuala Lumpur, Malaysia which opened as the company grew even during the pandemic.

Double Eleven has repeatedly been named as one of the fastest-growing companies in the UK, including by the Sunday Times (ranking 25th out of 100 companies).

In 2022, founder and CEO Leo Hutchinson announced that the company had tripled the number of employees in the previous 18 months, attributing the growth to the scale and complexity of the studio’s gaming projects.

Stakeholders in the North East told UKTN that the company regularly collaborates on its projects with smaller gaming studios in Tees Valley and the wider region, which supports the growth and success of these local startups and studios.

Double Eleven partnered with Teesside University to sponsor Animex Festival 2023 – an international gaming and animation event held in Middlesbrough. It also runs a work experience placement scheme for students at the university.

This year the company leased a new building in Middlesbrough’s tech-focused Boho Zone in its entirety for its head office. Through its parent company, Pneuma Group, Double Eleven’s founders invest in local businesses in Middlesbrough and beyond, including hospitality businesses and commercial property, with aims to develop the area.

Kimberley Turner, Double Eleven CFO, said: "In the past 15 years, we’ve grown from a dozen employees to over 380 employees, partnering with some of the most-renowned game companies in the world: Microsoft-owned studios like Bethesda Game Studios and Mojang Studios, as well as Rockstar Games and many more.

“We are proud of our Teesside roots and there are several advantages to having set up our headquarters there: IT infrastructure is good, renting space is cheaper than in the South and we’re just next door to the great Teesside University, which has over 20,000 students and one of the longest running game development courses in the world. Rail and other transport links mean we can be in London in three hours.

"Our biggest challenge is access to the best talent in the industry. The employment market is extremely competitive with some very big names and IPs for us to compete with. We hope that our long-term view and the great feedback we get from our teams will encourage people to seek us out."

ZeroLight

Newcastle-based ZeroLight provides an immersive technology platform for the automotive industry, enabling car dealers and other companies to provide digital, gamified and interactive experiences as part of the car-buying process.

ZeroLight was founded in 2014 by serial entrepreneur Darren Jobling, who’d previously run gaming companies including racing game developer Eutechnyx (previously called Zeppelin Games) in Newcastle’s early gaming sector in the 1990s.

The company works with some of the world’s biggest automotive players, including VW, Mitsubishi, Cadillac and Lucid Motors.

In an interview with business support organisation Creative UK, Jobling highlighted his experience attracting global clients and partners to the North East.

“Bar Nissan, the North East isn’t really known as a hotbed of car production — yet you’ve got people from Silicon Valley like Amazon, Apple, and Lucid Motors coming to the North East to access the latest and greatest technology in connected customer journeys,” he said. “We got a natural entrepreneurial cluster of game developers that started to grow [in the North East]. Some of these people started lecturing at our universities and then it became a self-propagating community. The rest is history.”

ZeroLight has raised more than £20m, including a series A funding round in 2020, led by North East investor Northstar Ventures.

Jobling told UKTN: "As a founder at ZeroLight, our journey in the North East has been nothing short of remarkable. Operating a global tech company from this region has allowed us to tap into a rich pool of talent, embrace diverse perspectives, and leverage a supportive ecosystem.

“While challenges exist, the benefits and opportunities derived from our North East base have been instrumental in propelling ZeroLight to the forefront of innovation in the global tech landscape."

Kinewell Energy

Based in North Shields in North Tyneside, Kinewell Energy is a clean tech company using AI to help offshore wind farm developers plan and construct wind farms efficiently.

Kinewell Energy was founded in 2015 and has since been backed by Durham University, Newcastle University and Innovate UK. It also received match-funding through the TIGGOR programme supporting offshore energy supply chains, run by Digital Catapult and the North of Tyne Combined Authority.

Its software has been deployed in more than 30 countries around the world to optimise cable layouts which connect wind farms to substations.

In October 2023, the company launched in Japan and announced a significant partnership with Equinor in the US, which is set to fuel further growth and create new jobs at Kinewell Energy.

Kinewell's founder, Dr. Andrew Jenkins, has been proactive in promoting how the North East can capitalise on the economic opportunity from the net-zero transition.

Dawn Dunn,
digital and tech sector lead,
Invest Newcastle

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The North East region has significant assets and infrastructure related to innovation, with a particular focus around AI, data science and machine learning. This is attracting a growing roster of international companies iThey all recognise the value of working alongside research-led institutions to develop IP in emerging markets like clean technology and offshore wind.

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Investor focus

Northstar Ventures

North East investor Northstar Ventures backs both high-growth businesses and high-impact social enterprises in the North East.

Working out of Newcastle, the team of nine invests in ‘mission-based’ founders with a particular focus on healthy ageing, the future of work and learning, the future of place, and climate tech.

Northstar currently runs three funds. The new Northstar EIS Growth Fund invests in late-seed to series A funding rounds, generally committing at least £500k per round with an aim to invest in four to six portfolio companies overall.

The North East Social Investment Fund provides affordable finance for social enterprises working on issues including poverty, unemployment, homelessness, and young offenders. The fund makes investments between £100k and £1m.

In an interview, investment director Rick Charnley told UKTN that Northstar focuses on healthy aging, biotech and clean tech as a way to support social and economic development in the North East.

Northstar has invested in around 60 portfolio companies, including MySalesCoach, a sales coaching platform, which recently raised £700k from the North East Innovation Fund, and LightOx which manufactures a light-activated drug to treat oral cancers.

Maven Capital Partners

UK-wide investor Maven Capital Partners has offices in both Durham and Newcastle, with a team of four investors across the two offices.

Since setting up in the North East in 2017, Maven has invested more than £30m into the region’s high-growth businesses operating across a range of sectors, including technology, manufacturing, engineering and bioscience.

Its portfolio companies include the largest independent engineering business in County Durham, Dyer Engineering, employee engagement Software-as-a-Service (SaaS) platform, Hive HR, and fintech platform, Pockit.

Maven manages the £27m North East Development Capital Fund, supported by the European Regional Fund as part of its £120m investment programme into SMEs in County Durham, Northumberland and Tyne and Wear.

The fund invests between £400k and £2m into established businesses with ambitious growth plans.

Foresight Group

European investor Foresight Group launched its Foresight North East Fund in 2022 as part of the next phase of its regional investment strategy.

The fund initially closed with around £18m of funds from Durham County Council’s Pension Fund and support from Teesside Pension Fund, and has since received a further £20m from British Business Investments and £30m from Tyne and Wear Pension Fund. In August 2023 it announced that the fund’s third close brought its value up to £90m.

Foresight recently opened an office in Newcastle.

It aims to invest up to £10m per deal into established, smaller companies across all sectors, with three investments made so far including specialist energy engineering service Quanta, based in Northumberland and the management buyout of RS Industrials. Matt Smith, partner and co-head of Private Equity at Foresight Group, said in the fund’s third close announcement: “We see great potential in the vibrant business community across the North East and Yorkshire, and the support from our investors further strengthens this.

“Across the UK and Ireland, we recognise the big impact growth companies can make and want to enable all economies to thrive. Since launching the Fund in June 2022, we have seen many fantastic businesses located across the North East and Yorkshire.”

Mercia Asset Management

In 2018, SME investor Mercia Asset Management set up a Newcastle office as its ninth UK office location, following its appointment as fund manager for the North East Venture Fund – a £27m pot under the £120m North East Fund.

The Venture Fund invests up to £1m per deal into early-stage innovative startups in Durham, Northumberland and Tyne and Wear. Not counting two exceptions for smaller investments, Mercia says the average cheque size for Venture Fund deals is just under £500k.

Mercia also invests other funds earmarked for Northern businesses, including two Northern Powerhouse Investment Funds (equity finance and debt finance).

In the first half of 2023, managing director Will Clark announced that Mercia had increased its Northern investments by 65% compared to the same period in 2022. In that period it made 12 investments into North East businesses totalling £5.3m.

Investments included employee wellbeing app Art Health Solutions and cybersecurity specialist Melius Cyber. Mercia also exited its portfolio company, Middlesbrough games developer SockMonkey Studios which was acquired by Canadian gaming company Behaviour Interactive.

Mercia previously exited electric vehicle charging firm Elmtronics, based in County Durham, which was acquired by Norwegian charging company Mer.