A new startup report, with expert-led recommendations, has been launched by Manchester Digital Strategy, in order to lay the right foundations for a stronger, more equitable and thriving start-up ecosystem for the region.
There are more than 10,000 digital and tech businesses in Greater Manchester and over 1,600 startups and scaleups. By nurturing a vibrant startup environment, the council can enhance the city’s competitiveness, retain talent and ensure long-term business prosperity.
Bringing together perspectives from founders, investors and business support functions across Manchester’s tech and digital industry, the Regional Start-Up Landscape Report offers insights into challenges and gaps in the start-up ecosystem to identify barriers for growth and build recommendations for future action.
The report has been compiled by industry body Manchester Digital and Manchester Angels, a technology angel investment network, with support from Manchester City Council's Digital Strategy Team, who lead the coordination of the delivery of the Strategy. The Digital Strategy will develop a consortium of key stakeholders, to use the seven practical, evidence-informed recommendations to inform future decision-making and to improve alignment, inclusivity and access within the startup and scaleup ecosystem.
Sherelle Fairweather, Digital Strategy Lead at Manchester City Council, said: “Manchester’s development and investment into innovation communities and start-ups is inspiring transformative ideas and solutions, bringing enormous benefits for everyone in our city and much wider. To help us all better understand the support that our diverse start-ups and scale-ups need to flourish, the Regional Start-Up Landscape Report provides data-informed insights into the current challenges and opportunities shaping the sector.
“By working closely with founders, investors, and business support networks, we aim to champion collaborative approaches that strengthen the ecosystem - ensuring that start-ups from all backgrounds, particularly those underrepresented, have the opportunity to grow, scale, and thrive, not only in Manchester but on a global stage too."
Katie Gallagher OBE, Managing Director of Manchester Digital, said: “This new report demonstrates the strength and innovation within our startup ecosystem, but it also highlights the work still to be done to ensure every founder and startup has the opportunity to succeed.
“We’re proud to have worked with the council and industry partners to help shape a roadmap for a stronger, more diverse startup sector, which attracts further investment, creates jobs and shines a spotlight onto Manchester within the global stage.”
David Levine, CEO of Glenluna Ventures and Principal at Manchester Angels, said: “You cannot improve what you cannot measure. For the first time, this report looks at what is working and not yet working in the Manchester tech ecosystem by examining the state of play through a wide range of different stakeholders. By talking to founders, investors and service providers in different sub-sectors and investment stages, this report shines a light on the progress made but also the work still to be done.”
The report highlights the need for greater alignment between the different stakeholders within the regional start-up ecosystem, with a number of suggestions for targeted support. The report also highlights the lack of diversity within the startup ecosystem, with recent research showing that female-founded tech startups received just 2% of VC funding and black founders just 0.5%.
Recommendations focus on practical actions that could improve cohesion, education, diversity and signposting to enable a broader range of businesses to flourish in Manchester.
The seven recommendations are:
- Create targeted support for founders between startup and scale up stages
- Update and promote a live ecosystem and funding map
- Make founder feedback a requirement for publicly led programmes
- Champion a founder’s hub as a primary navigation platform
- Improve inclusivity in startup investment networks
- Comprehensive place to find all startup activity
- Create a small founder grant fund for investment readiness
Business support programmes highlighted gaps in support provision, including better understanding of funding options for SMEs, greater access to high-risk seed funding and a lack of practical support for bootstrapped founders.
Key challenges cited by investors include traction, market sizing, cap table issues, unrealistic valuations and widespread misunderstanding of investor dynamics. Challenges faced by founders include geographic investment imbalances, cuts to R&D tax credits, a lack of role models and mentors with start-up experience and limited access to investment networks.
You can download the report and recommendations here:
https://manchesterdigitalstrategy.com/reports
