Manchester tech startups raise £532m, the highest outside of London

Manchester funding 2022 Image credit: Shutterstock

Manchester-based tech companies raised a record £532m in funding in 2022, the highest amount outside of London and the South East of England and retaining the top spot for the best-funded northern tech hub.

The data, provided by Dealroom, found that the city outperformed international cities such as Rome, Warsaw, Lisbon and Brussels.

“Manchester’s thriving tech startup scene is packed with innovation, fuelled by record levels of funding from 2022 and is outperforming much larger cities on the continent,” said Paul Scully, digital economy minister.

Notable rounds achieved by Manchester-based companies include Modern Milkman’s £50m Series C round in November, Freedom Fibre’s £84m investment and BE.EV’s £110m round.

Funding in the northern city soared 50% in 2022, up from £355m the year prior. Despite the continued growth in Manchester, London continues to attract the lion’s share of tech funding, with startups in the capital securing £16.2bn in 2022 out of a total £24bn nationwide.

Over the last five years tech businesses in Manchester have collectively secured more than £1.8bn in venture capital funding, the data showed.

Jobs in the Manchester tech sector have climbed 67% from 2020, with tech counting for a quarter of all jobs on offer in the area, according to job search engine Adzuna.

Dealroom estimates that there are more than 1,600 startups and scaleups within Manchester that employ approximately 60,000.

Paul Lewis, chief customer officer, Adzuna, said: “Technical roles continue to top the job lists such as software developers and data engineers but more general roles such as project managers and business analysts are also in high demand.”

Despite the wider tech downturn, Manchester-based tech companies have continued to raise funding so far in 2023. Earlier this month, Arctic Shores raised £5.75m in Series B capital.

Helen Verwoert, operational partner, Praetura Ventures, said: “We’re now seeing the impact that growing investment into Manchester’s early-stage business ecosystem is having.

“This is evidenced by the rise of brilliant new businesses such as Arctic Shores, which is using behavioural assessment technology to replace traditional CVs and remove unconscious bias from the recruitment process.”

Booking.com recently moved into an £80m Manchester office, while Starling Bank is set to create 1,000 jobs in the area.