Despite the UK leading Europe in venture capital fundraising, surpassing both France and Germany, global investment witnessed a significant decline last year, with science and technology scaleups in the UK feeling the brunt of this downturn. The UK has produced 152 'unicorns', companies valued at over $1 billion, outstripping France, Germany, and Sweden combined. These companies, such as Darktrace and Monzo, have been pivotal in driving global innovation across various sectors, contributing to economic growth.

However, without adequate venture capital investment, the future generation of UK unicorns might be compelled to seek funding overseas or face limitations on their growth potential, which could stifle innovation and curtail job creation within the UK. While the UK's leadership in fintech, AI, and life sciences is recognised by both domestic and international investors, emerging sectors like deeptech are still waiting for similar levels of support and recognition.

Science and Technology Secretary Michelle Donelan said: “The UK has built a £1 trillion tech sector with a thriving start-up scene. With further capital, there is no limit to where British startups can take their ideas.

“There has never been a better time to invest in British tech companies - with the UK leading on every key European metric and leading the world on emerging technologies like safe AI.

“Our Science and Tech Superpower campaign drives home the message to investors that we need to seize the extraordinary opportunities here on home turf - or risk promising companies travelling to international competitors for funding.”

Following the Chancellor's Mansion House Reforms, which aim to unlock up to £75 billion for high-growth businesses such as tech startups, there's a new initiative to boost private sector investment. These reforms are supported by a pledge from UK pension funds and the venture capital community to increase financing for scale-ups.

This campaign targets investors in major financial centres around the UK, including London, Birmingham, Edinburgh, Belfast, and Cardiff. Advertisements will appear on billboards placed within 200 metres of investor offices and along key commuting routes. Venture capital offices will receive wrapped copies of The Times, and digital advertisements will be featured online and in podcasts.

The campaign highlights regional hubs of innovation across the UK, showcasing spin-out companies originated from research at leading universities. One such example is Norwich-based Colorifix, which emerged from research at the University of Cambridge. Colorifix has developed innovative methods using bacteria to dye textiles, significantly reducing the clothing industry's environmental footprint in a cost-effective manner.

Boosted by initial funding from InnovateUK, Colorifix secured £18 million in an early-stage funding round, attracting the attention of fashion heavyweight H&M and earning a nomination for an Earthshot prize.

Orr Yarkoni, CEO and Co-Founder of Colorifix, said: “Since starting Colorifix as a spinout from the University of Cambridge, we have received important grants and support from governmental institutions to finance our scale-up journey, as well as valuable collaborations with world-class institutions.

“More so, locating our sites in Norwich and Cambridge has given us access to brilliant minds and enabled us to build a stellar team, which has been fundamental for the success of our company.

“We hope the government and investors will continue to address challenges such as inadequate funding and supporting networks to scale world-changing solutions and further strengthen the UK’s position in engineering biology.”

Science and technology hubs outside of London have seen huge increases in venture capital investments since 2019, with Liverpool, Sheffield and Glasgow all seeing more than 500% growth. 

Far exceeding all other cities, Birmingham saw 1183% increase in venture capital funding raised, driven by a specialist ecosystem surrounding autonomous vehicle technology.

Close to the city, Coventry based ‘Aurrigo’ makes self-driving vehicles that are used to transport passengers, baggage and cargo in airports all over the world.

Aurrigo’s recent growth journey was kickstarted by £16 million in funding from Innovate UK, where the company also received direct support through the organisation’s Scale up Programme in 2021. Here, it began to consider a flotation on the London Stock Exchange which initially listed Aurrigo at 48p per share, with a market capitalisation of £20 million. 

Since listing on Alternative Investment Market (AIM), Aurrigo has almost doubled in value, reaching a market capitalisation of £42 million. Commenting on his company’s growth journey, Aurrigo’s CEO and Founder, David Keene, added that: “Aurrigo International is very proud to be disrupting the global aviation market with autonomous solutions designed, developed, and built at our Advanced Engineering Centre in Coventry.

“We have tapped into outstanding support from the government for commercialising our innovation and leveraged every bit of academic collaboration we can from universities, including Aston, Coventry, and Warwick.

“This has aided us in getting to market quicker with our Auto-DollyTug product, an all-electric autonomous vehicle that is moving baggage and cargo around six international airports. The outstanding graduates they produce have also been crucial to our recruitment plans as we expand at pace.

“I’m delighted to put the Aurrigo International name fully behind the campaign to promote the UK as a Science and Tech Superpower.”

Michael Moore, Chief Executive of the BVCA, said: “The UK has a thriving science and tech ecosystem built on world-class research and development, a strong talent pool and connectivity. These key factors position the UK as a global Hub for technological advancement.

“Our research shows that private equity and venture capital (private capital) invests billions in the UK science and tech sector. It’s vital that the UK remains the best place in the world to start and grow a business, and the British Private Equity & Venture Capital Association (BVCA) welcomes the drive to encourage further private capital investment in these sectors in the UK.”