May 2023
Startups and scaleups to watch
Developer of sustainable battery technology. HQ: Stoke Prior, Worcestershire. Founded: 2016. Funding: £10.6m.
Provider of background screening and identity investigation services. HQ: Birmingham. Founded: 2018. Funding: £500,000.
Sustainable food harvesting startup using 3D cameras equipped with machine learning to identify broccoli crops that are ready for harvest. HQ: Shropshire. Founded: 2022. Funding: £500,000.
CREST-approved provider of cybersecurity services. HQ: Birmingham. Founded: 2016. Funding: £2m.
An AI tool used for grading assignments in the education system that gives insight and feedback on students' work. HQ: Birmingham. Founded: 2019. Funding: £960,000.
Developer of AI digital twin software that optimises building energy use. Founded: 2016 HQ: Birmingham. Funding: £2.2m.
Wall-climbing robots that perform dangerous tasks at tall heights including painting, visual inspection of difficult-to-reach areas and building and infrastructure surveys. HQ: Birmingham. Founded: 2018. Funding: £210,000.
A platform for energy asset analysis providing benchmarking tools for energy storage. Founded: 2020. HQ: Birmingham. Funding: £4.3m
Developer of electric vehicle charging technology. HQ: Birmingham. Founded: 2014. Funding: £12m.
A knowledge-sharing platform where workers in a deskless company can create short-form videos or programme an automated assistant to share company knowledge. HQ: Birmingham. Founded: 2020. Funding: £1m.
A platform used by telecom firms to determine where and how to acquire, establish, and manage new sites. HQ: Birmingham. Founded: 2020. Funding: £4.1m.
Facilitates drone logistics operations and partners with firms looking to establish air-based delivery routes. HQ: Coventry. Founded: 2017. Funding: £1.3m.
Company spotlights
Energym
Energym has created an exercise bike that generates power during workouts and stores the electrical energy in a removable battery pack. The Birmingham-based startup aims to create banks of these bikes spread across multiple locations, such as gyms, offices, and commercial environments. During an average workout, one bike can generate enough energy to charge an iPhone 12 times, the startup says.
Will Flint, founder of Energym, drew inspiration for the company from his own life experiences. Flint was stabbed whilst coming to the aid of a woman who was being attacked. His subsequent reflection in hospital led him to a new focus: climate tech.
Flint drew up the concept designs for the first bike on a flight back to the UK after travelling, where he saw first-hand the destruction of the Great Barrier Reef. Energym’s technology claims to achieve above 85% efficiency in turning human power into stored electrical energy. The company has been recognised for its innovation, winning Birmingham Tech Week’s Startup of the Year award in 2020.
Flint founded Energym in 2017 and it has grown to a team of 20. It has raised a seed round of £450,000 from three angel investors. Flint points to the West Midlands universities as a key strength for the region.
“The West Midlands is great for collaboration, especially when you’re a startup or scaleup in the digital tech space,” he says. “For example, early-stage feasibility tests with the University of Birmingham allowed us to explore the potential of our product and begin developing it confidently.”
Energym has also partnered with West Midlands fitness clothing ecommerce giant Gymshark. The two companies began their relationship when Energym was accepted on to Gymshark's accelerator programme, where it received help with prototype testing and facilities.
Flint says most of Energym’s challenges “haven’t been specific to the West Midlands”.
“We’ve just expanded into Germany, so Brexit has raised a few issues,” he says. “Global shortages of critical components like microchips have made logistics more challenging too.”
Onto
Onto is a Warwick-headquartered electric vehicle subscription company and has over 140 people in its team. The company’s electric vehicle subscription service includes the car, insurance, breakdown cover, servicing, 750 miles a month and public charging, with no deposit.
In January, Onto secured £100m in credit from the investment group CDPQ and asset manager Pollen Street to support its European expansion plans. However, its European plans are currently on pause and it’s focusing on strengthening its UK position.
“We have currently paused our expansion into Europe while we solidify our position in the UK market, as in the current macroeconomic climate it’s vital that we focus on sustainable growth and profitability,” the company says.
To date, Onto has raised £340m across equity and debt funding, including a £50m Series C funding round led by financial services group Legal & General last July. Last year the firm reported a 300% growth in its revenue.
It was founded in 2018 by co-founders Rob Jolly and Dannan O’Meachair. Jolly previously worked for automotive manufacturer Jaguar Land Rover, while O’Meachair has a background in project management.
“The West Midlands has a great history when it comes to industrial innovation and we’re now seeing a bunch of businesses launch in the region, particularly those with a focus on the green economy,” says Jolly.
“This creates a fantastic community and we’re hoping that it will continue to drive strong talent and investment in the region.”
CrowdProperty
CrowdProperty is a platform that’s increasing access to funding for small to medium-sized housing developers. Founded in 2013, the Birmingham-based company describes its ethos as “property finance by property people”. Its platform facilitates peer-to-peer lending to support the development of new properties.
CrowdProperty opens up investment into property development schemes beyond the largest firms. The company says it has supported the development of more than 3,000 homes to date. Michael Bristow, Andrew Hall and Simon Zutshi founded CrowdProperty after experiencing funding challenges first-hand to build new homes.
The trio of SME property developers set out to solve this with a tech-driven platform to speed up the process of sourcing financing for property projects. CrowdProperty and its team of more than 50 staff have since raised over £20m, the majority of which came in the past two years. The most recent funding came from British Business Investments, the commercial subsidiary of the British Business Bank, which invested £15m into the company in April 2023.
The investor was keen to support the company’s goal of giving smaller housing developers outside of London funding access. CrowdProperty also ran a successful Seedrs campaign in which it secured £481,000.
Bristow, who is serving as chief executive of CrowdProperty, said that Birmingham is an ideal place to operate his business. He said that in Birmingham, costs are “significantly lower than a traditional financial services hub, such as London”.
He added that this means the company can “recruit more people, build a better-resourced business and scale faster than if we were based in the capital”.
Bristow said: “The West Midlands has a very strong talent pool that continues to grow, although with a less extreme relative demand than in London. It is therefore evident that we attract and retain staff for longer”, pointing to West Midlands-based young professionals being “less transient”.
“We also enjoy geographical advantage. Fundamentally we are backing physical assets all around the UK – we can get out and about and visit those sites from a more central position in the UK.”
Clarilis
Law firms are always in need of tools to improve operational efficiency, and the document-heavy industry’s demands presented an opportunity for legal tech company Clarilis. Based in Leamington Spa, Clarilis is using automation to quickly and effectively draft documents for law firms and corporate legal teams.
Founded in 2011 by former solicitor James Quinn and his brother and technical developer Kevin, Clarilis was inspired by first-hand experience with corporate tax law. The company claims its intelligent drafting platform liberates legal teams from the tedious routine of document drafting, allowing them to put their attention towards more important tasks.
Commercial leases and ancillaries can be drafted in minutes, the company says, and more complex documents with several additional parties can be created in under two hours. The platform was first launched in 2015 and, since then, Clarilis has secured £9.1m in funding, with the most recent coming in a £6m Series B round from Mercia Asset Management, a private equity firm that specifically targets regional businesses, and Gresham House Ventures. The company team has also grown to around 70 staff.
Clarilis lists major international law firms among its client list, including Wilson Sonsini, Browne Jacobson and Farrer & Co, along with the legal departments of organisations including the National Grid and PwC.
“Clarilis' success hinges on the quality of our team, and the West Midlands presents an excellent location for attracting top talent,” says James Quinn, co-founder and CEO, Clarilis.
Quinn says that being based in the region means the company has "access to a vast array of skilled professionals, ranging from proficient graduates from exceptional universities, to experienced technical developers and well-tenured lawyers".
Quinn adds that the West Midlands "enables us to cultivate an ideal work setting, enhanced by great local transport and facilities".
Nourish3d
Birmingham-based Nourish3d creates personalised nutrient gummies. Customers complete an online questionnaire about their lifestyle and goals, and then Nourish3d uses 3D printing technology to create bespoke gummy vitamins in-house and on demand. Melissa Snover founded Nourish3d in 2019 after dropping a bag of pills and supplements at airport security and thought there must be a more convenient way to take vitamins.
The company is backed by more than £15m in funding and sells its tailor-made gummies via online subscription. The company’s most recent raise came in November 2022, when it secured £5m, with financial backing coming from parent company Rem3dy Health. Nourish3d is active in the UK and US markets and sees Asia as a key target for expansion.
Its revenues increased more than six-fold over covid and the company has also expanded into the children’s vitamins market. Snover, who is the company’s CEO, says that Nourish3d has “benefited from the skills and expertise of recruits from three local universities who focused their studies on additive manufacturing”.
She also points to the city’s “reasonable rent for office space and production units, as well as the direct transport links to the rest of the UK” as strengths for the West Midlands tech ecosystem. “Finally, the thriving hub of innovation, local authority support and collaboration between independent businesses which we have found throughout the community in Birmingham has been invaluable to our growth,” Snover adds.
He added that this means the company can “recruit more people, build a better-resourced business and scale faster than if we were based in the capital”.
Bristow said: “The West Midlands has a very strong talent pool that continues to grow, although with a less extreme relative demand than in London. It is therefore evident that we attract and retain staff for longer”, pointing to West Midlands-based young professionals being “less transient”.
“We also enjoy geographical advantage. Fundamentally we are backing physical assets all around the UK – we can get out and about and visit those sites from a more central position in the UK.”
Investor Focus
Launched in April, Midlands Mindforge is a new initiative formed by eight local universities to help spinouts in the region commercialise ideas born out of academia. It is following a similar blueprint to Northern Gritstone, an investment firm set up by universities in Manchester, Leeds and Sheffield to support spinouts in the North of England.
The investment firm’s founding members are Aston University, the University of Birmingham, Cranfield University, Keele University, the University of Leicester, Loughborough University, the University of Nottingham and the University of Warwick. It is seeking to raise up to £250m in capital to back the region’s spinouts and early-stage startups.
The Midlands Engine Investment Fund is an initiative launched by the government-owned British Business Bank. Its goal is to boost the region’s economy by providing small business loans, debt finance, equity finance and proof of concept capital. Its smallest funding packages are £25,000, while its largest are £2m.
It works with ten Local Enterprise Partnerships based in the West, East and South Midlands, which manage funds and evaluate applications. Last year, the fund reached a £200m investment milestone spread across 856 transactions since its inception in 2017.
Birmingham-based Midven was created by local entrepreneurs from Derby, Leicester and Nottingham in 1991 to address the lack of funding in the region. The inaugural fund it managed was provided by HSBC. In April 2021, Midven was acquired by growth equity firm Future Planet Capital.
In March 2023, the West Midlands Combined Authority and West Midlands Pension Fund launched the West Midlands Co-Investment Fund to back high-growth SMEs. The £25m fund, which is managed by Midven, makes equity investments of up to £1m and matches private investors. It is backing businesses based in Birmingham, The Black Country or Coventry and is targeting companies operating in advanced manufacturing, green technology life sciences, creative and digital.
Since it was established in 2021 as the Business Growth Fund, BGF has invested more than £3.5bn in over 500 companies. The investment company takes a “hyper-local” approach, with its 15 offices spanning across the UK and Ireland.
One of its offices is located in Birmingham and to date BGF has invested over £600m in 33 Midlands-based businesses. The long-term investor makes minority equity stakes, typically between £1m and £20m. Across the Midlands, its investments include Nottingham-based companies Myzone and Cheesecake Energy.
Operating out of Coventry, Minerva Business Angels is part of the University of Warwick Science Park. The early-stage investor works closely with universities and has invested more than £16m across 99 firms since its inception in 1994. Its tech investments include Kubos Semiconductors, magnetic nanoparticle product company nanoTherics and Recycling Technologies.
Mercia manages the Northern Venture Capital Trust Funds, part of the Midlands Engine Investment Fund, and the Northern Powerhouse Investment Fund, amongst others. Over the last two years, Mercia has invested almost £29m in equity and debt financing into companies based in the West Midlands.
“The West Midlands has a thriving software sector, with HR tech being one of the areas where it is starting to gain an edge – for example companies such as Birmingham-based Talkout and Stoke-based Huler,” says Sandy Reid, deputy fund principal, Mercia.
It currently has approximately £1.4bn of assets under management. Other investments include University of Sheffield AI spinout Productive Machines and Nottingham-based health tech company NuVision.
“One area in which the region could do better is in educating early-stage entrepreneurs, so they understand how to produce a commercial business plan and make a credible approach to investors,” adds Reid. “Many of the decks we see focus too much on the product but lack the key financials and sales and marketing strategy.”
Digital skills bootcamps:
How the West Midlands is leading the way
Digital skills bootcamps:
How the West Midlands is leading the way
The digital skills gap is a perennial problem holding back UK tech innovation. Free, flexible bootcamps that teach skills such as coding and data analytics are one way to address this issue – and it’s an area where the West Midlands is leading the way.
The West Midlands was one of just two regions, alongside Greater Manchester, to initially trial the digital skills bootcamps. Since 2019, the West Midlands Combined Authority (WMCA), a group of 18 local councils and three local enterprise partnerships (LEPs), has been overseeing the delivery of the bootcamps.
Last year alone, those bootcamps supported over 2,000 adults in the West Midlands who were unemployed or looking to upskill to get a better-paid job, with around half of the participants coming from Black, Asian and minority ethnic backgrounds.
The success of digital skills bootcamps in the West Midlands has led to other regions following suit. Over the past 24 months, the government has rolled out the initiative to more regions including Liverpool, Lancashire, Derbyshire, West Yorkshire, Devon and Nottinghamshire.
The bootcamps are free of charge for learners and equip West Midlands residents with digital skills, giving them access to roles in areas like coding, cybersecurity, data analytics and digital marketing.
Courses are typically part-time and often take place during evenings and weekends, allowing residents to complete the digital skills training around their existing jobs or family responsibilities. They typically last between eight and 20 weeks.
The bootcamps are delivered by a wide range of specialist skills providers, ranging from universities to organisations specialising in particular digital skills or targeting specific demographics. Current bootcamp providers include The Development Manager, Code Institute, Learning Curve Group, NIYO Enterprise, Resume Foundation, Aston University, University of Birmingham and Coventry University.
Tech businesses can encourage existing staff to apply as participants or recruit directly through the bootcamps. They can even submit applications to establish their own bootcamps, where they help to design the training to give them precisely the digital skills and experiences they need.
With
81% of UK managing directors saying a lack of digital skills is negatively affecting their company, there is a clear business need for bootcamps.
Kevin Vashi, managing director of Birmingham-based IT training provider, Netcom Training, says: “Digital bootcamps are a huge opportunity for people to expand their skillset and push their careers forward, without making a huge commitment to a long-term training programme. They are also a fantastic way for employers to access new talent and offer training to existing employees, widening the skills in their business for future growth.”
In April 2023, the WMCA secured a further £15.15m in government funding to expand its bootcamp delivery in key sectors of the region’s economy – digital, retrofit, green, logistics and advanced manufacturing and engineering.
To date, more than £35m has been invested in WMCA’s skills bootcamps. The latest funding injection will open over 4,350 new spaces on bootcamps to support people looking to upskill or land a new job. The investment will ensure the bootcamps run until at least March 2024.
Councillor George Duggins, the WMCA portfolio holder for productivity and skills and leader of Coventry City Council, says: “A skilled workforce is a productive workforce, and it is only through giving them the relevant skills, training and support, that they can play their part in driving forward the West Midlands’ economy. The funding for bootcamps is a great example of investing in opportunities for our people.”
Ensuring more people from disadvantaged or marginalised communities can access digital skills training is central to the success of the bootcamps initiative. According to
Reed.co.uk, in the first quarter of 2023, listings for full-time digital jobs had an average salary of £39,679, well above the average full-time salary in the UK, which stood at
£33,280 as of mid-2022.
The bootcamps are structured to lower barriers for participation, regardless of socioeconomic background. They are free and some courses provide laptops and materials. For example, Oyinkansola Adebayo is the CEO and founder of Niyo Group, which runs bootcamps geared towards Black women looking for a pathway into a tech career.
“It’s absolutely crucial that we empower more Black women to work and succeed in the UK tech industry,” she says. “Tackling the digital skills gap requires a truly diverse talent pool, but more important still is the need to have diverse and representative teams involved in the creation of digital products and services, preventing bias and ensuring inclusivity. The bootcamps are a shining light of how we can achieve this.”
Nicola Wilkin is a professor of physics and director of education at the University of Birmingham’s College of Engineering and Physical Sciences. She helps oversee the university’s digital skills bootcamps in coding and data analytics, which are run in partnership with the WMCA, and she emphasises the importance of getting under-represented groups to participate in the bootcamps.
Wilkin explains: “We have focused our recruitment and scholarships on women and under-represented groups in tech. Our students to date are predominantly from ethnic minorities, with 40% identifying as female. This enables us to specifically address imposter syndrome issues, ensuring representation in the learner cohorts. For the region’s businesses, they are then able to benefit from the entire community’s talent pool.”
The positive impact the bootcamps can make is reliant, in part at least, on engagement from tech employers in the region. It is an example of a successful collaboration between the public and private sectors. Developing and enhancing digital skills for prospective employers is inherently valuable for the individuals and the workforce as a whole, but connecting bootcamp participants with those seeking to recruit people with digital skills is a crucial link.
Adebayo explains: “There are immensely talented people coming through Niyo’s bootcamps, and by working with partners like WMCA, we want to take things further still, making sure there are exciting employment opportunities for learners once they have completed a course. This is the all-important next step in ensuring the bootcamps deliver the best outcomes.”
Wilkin believes job roles could be better geared towards attracting bootcamp participants. She also stresses the importance of events in bringing together bootcamp cohorts with employers in the West Midlands to make valuable connections.
“It would be beneficial if job adverts could be written to attract bootcamp graduates and not implicitly exclude them,” Wilkin says. “We work closely with a broad range of employers and are always delighted to welcome new businesses at project presentations and networking events. These provide an opportunity to discover how the bootcamps prepare learners for roles in web development, data analysis and applied cyber teams.”