Bristol attracted the third largest amount of investment into tech businesses last year of any UK city, according to a new report, which also named one of its fastest-growing firms among the country’s top 10 ‘superstar scale-ups’ of 2020.
Some £339m in venture capital funding went to Bristol tech firms last year, according to the latest annual report by Tech Nation, the national network for tech entrepreneurs. 
That put the city behind the investment hotspot of Oxford in second place with £436m. London was way out in front with £8.6bn.
The report, which gauges the strength of the UK’s tech sector and the role played by the regions, shows that the South West is home to nearly 17,500 digital tech firms – around 7% of the total number of businesses.
These firms employ 67,870 people and have a combined turnover of £9bn.
Meanwhile, Bristol-based innovative semiconductor company Graphcore was named among the report’s top 10 superstar scaleups in 2020, which between them secured a fifth of total UK tech venture capital (VC) investment, at £2.5bn.
Graphcore CEO Nigel Toon said: “The UK is continuing to punch well above its weight in terms of building and growing world-class technology companies, even in the midst of these unusual and uncertain times.
“We are, of course, delighted that Graphcore is identified as one of the standard bearers for this national success story.
“Deep Tech represents the coming together of so many great British attributes – our reputation for innovation in science and engineering, the excellence of our academic institutions and, most recently, our status as a leading player in the development of artificial intelligence.”
In its seventh year, the report lifts the lid on tech in an extraordinary 2020, revealing how the sector has changed, who the top performers were through the year, and the challenges and opportunities the UK faces as it navigates out of the pandemic and leaving the EU.
It also warns that VC investment continued to gravitate towards London, with the gap growing over the past three years.
The percentage of total UK VC investment made into London has increased from 73% to 88% between 2018 and 2021.
“The UK is a world-leading tech centre because of the collective strength of its regional tech clusters, so they must be supported in their growth journey by the development of more targeted regional investment funds with the firepower and risk attitude to level the funding playing field for companies outside London,” the report said.
Gerard Grech, founding chief executive, Tech Nation, comments: “This year has highlighted the UK tech sector’s enormous resilience and world-beating innovative spirit. In the face of a major global crisis, it has not only survived; in many areas, it has boomed. From EdTech to HealthTech, tech scaleups are at the centre of rebuilding the British economy and setting new standards worldwide.
“Now the focus turns to the future, as the UK pivots to a wider global role. Developing Britain’s AI-powered deep-tech is especially critical. Much of our future economy will be built on this new technology that leverages machine learning for faster innovation. Bold investment is needed in R&D to boost Britain’s new deep-tech companies and ensure our global competitiveness.
“These are truly exciting times for UK tech. The successes of the past decade have shown what the UK is capable of when policy foresight, investment and a diverse and ambitious pool of talent come together. By continuing to set our sights high, the next decade promises to be the most innovative yet.”
