The Rise of the Regions: Why 45% of UK Startup Funding Rounds Now Happen Outside London
For years, the story of UK startup funding has been synonymous with one city: London. The capital has long dominated venture capital flows, networking events, and investor attention — leaving other parts of the country fighting for visibility.
But that story is changing.
According to the HSBC Innovation Banking x Dealroom Q3 2025 report, around 45% of all UK funding rounds this year have been completed outside London. That marks one of the biggest geographic shifts in the history of the UK startup ecosystem — and it could redefine where innovation happens next.
Between January and September 2025, nearly half of all startup deals took place in regions such as Manchester, Leeds, Bristol, Birmingham, Glasgow, and Belfast. While London still commands the largest ticket sizes, the data shows a clear diversification of early-stage investment.
This shift is being driven by several factors:
* Remote-first business models are levelling the playing field — founders no longer need a Shoreditch postcode to get noticed.
* Regional accelerators and creative clusters (like Bristol’s Engine Shed, Manchester’s MediaCity, and Scotland’s Creative Informatics) are producing credible, investment-ready startups.
* Local investors and angel networks are becoming more active, often supported by UKRI, Innovate UK, and British Business Bank initiatives.
💡 What This Means for Creative, Digital & Tech Founders
For founders in the creative and digital industries, this regional momentum presents real opportunities. Investors are increasingly willing to back innovation wherever it happens — particularly when it’s connected to local strengths:
* Manchester is emerging as a northern powerhouse for gaming and digital media.
* Bristol and Bath are hotbeds for immersive tech and film production.
* Leeds and Sheffield are growing fintech and health-tech hubs.
* Glasgow and Edinburgh are leading in creative AI and digital storytelling.
This decentralisation means creative founders can build successful startups without relocating — a major win for diversity, affordability, and regional talent retention.
📊 The Bigger Picture
The shift isn’t just about fairness — it’s about performance.
Startups outside London often:
* Have lower operational costs, allowing more runway per pound raised.
* Access local partnerships with universities, studios, and public institutions.
* Benefit from regional funding programmes, such as Creative Catalyst, North of Tyne Innovation Recovery Grant, or Scottish Enterprise’s Innovation Support.
Together, these factors make regional startups more resilient and capital-efficient — two things investors now value highly.
⚠️ Caveats & Challenges
While the 45% statistic is a milestone, founders outside London still face challenges:
Deal sizes are smaller: While the number of rounds is up, the total value remains London-heavy.
Access to later-stage capital is still limited in many regions — Series B+ funding often requires tapping London or US investors.
Visibility and networks remain critical; regional founders need strong digital profiles to stay on investors’ radar.
🚀 What Founders Can Do Now
1. Leverage regional support ecosystems — join local creative tech clusters or innovation hubs.
2. Apply for regional innovation grants to match early investor capital.
3. Show national and global ambition — investors outside London still want scalable models.
4. Network digitally — use platforms like LinkedIn, Dealroom, and Angel Investment Network to build visibility beyond your postcode.
✨ The Bottom Line
The fact that nearly half of UK startup funding rounds now happen outside London signals a maturing, more inclusive ecosystem. Creative founders from Manchester to Glasgow are proving that world-class innovation doesn’t have to come from the capital.
For the first time, the UK’s startup map is truly national — and that’s great news for creativity, innovation, and the next generation of founders.