Glasgow is already well established as a leading European city for financial firms, and is now developing itself as a centre for startups and scaleups too. As Scotland’s most populated city and the United Kingdom’s fourth, Glasgow offers vast potential for businesses to tap into, including access to an abundance of talent, collaborative networks, and flourishing tech and creative communities.
Of the 2,451 high-growth Scottish companies currently tracked on the Beauhurst platform, 647 are Glaswegian (26%). Whilst Edinburgh does boast a larger volume of ambitious businesses, those based in Glasgow City dominate in their valuations, reporting a higher combined turnover, at £5.97b versus £3.26b. Glasgow also hosts an impressive 89 scaleups, alongside 31 academic spinouts, including clinical diagnostics firm Dxcover and FoodTech company ENOUGH (both spun out from the University of Strathclyde).
And according to Tech Nation, the city is among the top three fastest-growing tech investment hubs in the UK. So, having previously analysed the high-growth landscapes of Bristol and Leeds, we’re now shining a light on Glasgow’s thriving startup and scaleup ecosystem. We explore key funding trends, and what makes the city such a good place for some of the UK’s most innovative businesses.
Equity investment into Glasgow startups
Over the last decade, Glasgow’s competitive edge and world-class talent has attracted considerable investment to its innovation ecosystem, from both international and domestic funds. Our data indicates that, between January 2011 and June 2021, high-growth companies in Glasgow secured 557 equity fundraisings (including unannounced deals), amounting to £445m.
And with the continued injection of large amounts of capital to the city, total amount raised by Glasgow startups has already reached record levels this year—£93.4m worth of equity investment was announced in H1 2021 alone (compared to just £40.2m and £14.0m throughout the whole of 2020 and 2019, respectively).
Glasgow-based companies that have most recently secured equity funding include Craft Prospect, a space engineering firm that offers services in responsive operations, mission architecture, and novel space applications—it’s contributing to Glasgow’s growing satellite collection (Glasgow produces more small satellites than anywhere in the world outside of California!). Craft Prospect raised £800k in September, from Capital for Colleagues, to expand its flight heritage capabilities, grow the team, and develop new products and services.
Back in August, Total Chatbots (which builds bespoke chatbots to enhance customer experiences) secured £25k in an unannounced round, whilst Willo raised £360k for its video interviewing software. University of Glasgow spinout and biopesticides company Solasta Bio secured a £1.3m round with numerous investors, including Cambridge Agritech, Scottish Enterprise, and SIS Ventures. Meanwhile, OneBanks raised £3.28m—bucking the trend seen amongst challenger banks, OneBanks provides physical banking services across the UK, offering a cost-efficient way for banks to maintain in-person contact with the communities they serve.
Glasgow’s world-class universities
Its strong graduate pool makes Glasgow a very attractive location for entrepreneurs leading new startups or scaling companies. Labelled the ‘academic city of Scotland’, Glasgow is home to five universities, including the University of Glasgow, University of Strathclyde and Glasgow Caledonian University. With each placing in the top 250 of the Times Higher Education World University Rankings, these institutions not only put Glasgow on the map as a centre for education but also as a hotspot for new talent.
Notably, Glasgow is the only UK city outside of London to have two universities ranked in the top 40 for research. The prevalence of academic institutions in the city is a core strength that fuels research and the transfer of ideas to market, with spinouts making up 7% of Glasgow’s high-growth population, far higher than the national average of 3%. These spinout companies are attracting increasingly vast amounts of equity investment, from just £565k announced in 2011, to £44.3m in 2021 so far. Many of these spinouts are backed by Scottish Enterprise-managed funds, which aim to accelerate the commercialisation of university research and innovation.
“Scotland is widely recognised as having a supportive entrepreneurial ecosystem with entrepreneurs, spinouts, and early-stage companies able to benefit from the support offered by Scottish Enterprise, Scotland’s economic development agency. This includes SE’s High-Growth Spinout Programme (HGSP), which offers financial and wrap-around advisory support, aimed at commercialising Scotland’s research strengths—with a focus on the commercialisation of leading-edge technologies in Scotland’s universities, research institutes, and NHS Boards.”Kerry Sharp, Director, Growth Investments, Scottish Enterprise
Startup accelerators and incubators
Glasgow boasts world-class startup and scaleup infrastructure, with 321 of the city’s high-growth companies having attended at least one of our tracked accelerator programmes. This makes accelerators the most popular method of growth for Glasgow-based businesses.
A range of specialist accelerators exist in Glasgow to help local businesses reach their potential. BioCity, for instance, accelerates life sciences companies by helping them find press opportunities and pitch to industry experts. And within BioCity is MediCity, designed for healthcare ventures, from medical startups to wellness ventures.
Meanwhile, tech accelerator Inovo brings together businesses and co-founders with the University of Strathclyde. The programme encompasses the Offshore Renewables, High-Value Manufacturing and Connected Places Catapults, as well as Scottish Innovation Centres CENSIS, IBioIC and The Data Lab. Neighbouring Inovo is the University of Strathclyde’s purpose-built Technology and Innovation Centre (TIC), which emphasises the importance of impact-focused partnerships.
co-working spaces in glasgow
Beyond its famous Victorian and art nouveau architecture, Glasgow also offers several modern co-working spaces to support the city’s innovation ecosystem. One notable example is RookieOven, whose alumni include the likes of Shed Collective and Microsoft. Other co-working office spaces in Glasgow City include Clockwise and The Distillery (housed at The Whisky Bond, Glasgow’s creative hub for designers and social innovators).
additional support networks in glasgow
Glasgow startups can also benefit from several other programmes, including:
Strathclyde Business School’s Hunter Centre for Entrepreneurship, which aims to enhance entrepreneurship and innovation in Glasgow through research and support; Scottish Development International, which has more than 30 offices worldwide, supporting entrepreneurs to start and scale their businesses in Scotland; Scottish Enterprise’s Scottish Manufacturing Advisory Service (SMAS), which helps manufacturing companies to increase productivity, such as through identifying cost savings or supply chain opportunities and adopting new tech; Strathclyde Inspire, which supports the university’s staff, students, and alumni to explore potential opportunities for entrepreneurship or research commercialisation.
Glasgow’s strong startup communities
Glasgow is renowned for its award-winning tech startups and creative industries, the convergence of which has already nurtured a wide range of high-potential ventures in the city.
a booming tech hub
Glasgow is home to a diverse portfolio of tech sectors and verticals, including cleantech, software-as-a-service (SaaS), fintech, machine learning and, most recently, satellite imagery and spacetech. Glasgow’s strong cohort of local businesses has been effective in attracting more high-growth tech companies to the area. In fact, one in three of the high-growth companies headquartered in Glasgow are now technology or IP-based businesses. And according to the Scotsman, tech jobs in Glasgow have increased by more than a quarter in the past two years, and now make up 28% of the city’s vacancies.
the creative capital of the uk
Home to The Glasgow School of Art and The Royal Conservatoire of Scotland, Glasgow is known for being a melting pot of creativity, even winning the title of the UK’s top cultural and creative capital in a 2019 report by the European Commission. Beyond art and design, Glasgow is also at the centre of the music industry, designated the UK’s first UNESCO City of Music in 2008. We expect to see a rise in the number of fast-growing startups within Glasgow’s creative industries, joining the likes of TV, film and video game development company Blazing Griffin, and video marketing specialist 29studios.
“With access to world-class research, an entrepreneurial culture, and an impressive talent pool, Glasgow is a great place to start and build high growth potential technology companies. It also has a long history of innovation and creativity. That’s evident in our own portfolio, including most recently with energy software business Smarter Grid Solutions and regulatory software specialist AutoRek—Glasgow-based businesses with international ambitions and a global outlook.”Calum Paterson, Managing Partner, Scottish Equity Partners
Original article – https://www.beauhurst.com/blog/glasgow-startups-scaleups/