There’s a lot of talk about the North’s rising stock, thanks to a renewed focus on devolution and a certain No.10 North.
And while it feels like optimism has suddenly spiked, it’s actually been building for far longer and there are examples of how the economy – and in particular, the start-up ecosystem – is evolving right under our noses.
That’s something we get to see up close through PraeSeed, our annual cohort investment programme. Each year we select a core cohort of around a dozen promising start-ups from hundreds of applications.
Now in our third year, the programme is starting to reveal some bigger-scale trends and movements in the Northern founder ecosystem.
Founder pipeline
There’s a clear shift towards more IP-rich, deep-tech and hardware businesses. There’s stronger representation from sectors like life sciences, advanced materials and industrial tech.
There’s also less pure-play AI than many may expect. AI is being used – of course it is – but it’s more commonly within the operations of specific industrial or technical businesses, rather than being the principal product.
This move doesn’t necessarily reflect the start-up ecosystem at large, but PraeSeed is unique because it gives us a pulse-check of what’s at the very top of the founder pipeline, and therefore what will be dominating – with the right support – in a few years’ time.
Just as the types of businesses coming through are broadening, so are the people and places behind them.
Three-quarters of this year’s cohort are from diverse backgrounds, and more than half have at least one female founder.
Of course, this is partly due to the hard work that’s been done in recent years to improve visibility and access for underrepresented founders. Initiatives such as Investing in Women code, Foundervine, The BlaST Ntwork, Manchester Digital, Climb UK and Lifted Ventures – to name a few – have already helped to move the dial.
But it may also be connected to the changing sector mix we’re seeing. As more businesses emerge from universities and research institutions, we’re observing a broader range of people entering the founder community. Greater diversity in the founder base and greater specialism in the businesses being built aren’t necessarily two distinct trends, they’re part of a fuller broadening of the North’s early-stage ecosystem.
In fact, almost half of this year’s 13-strong cohort have spun out of higher education providers.
Meanwhile, there’s an interesting interplay between the geographical regions this year’s founders are hailing from and the heritage industries of those areas.
That comes through in the businesses themselves. In the North East, for example, we’ve seen companies working in semiconductors and battery technology, including Durham-based Convergent Labs, which is developing a semiconductor material for next-generation medical scanners, and Newcastle’s RecoVolt, which has spun out of PhD research into lithium battery recycling. Meanwhile, in Bradford, NexCAD is using AI for engineering compliance, while across Greater Manchester we’re seeing businesses emerge in areas like space technology and life sciences.
It’s a reminder that start-up ecosystems don’t develop in a vacuum. Often, the newest generation of businesses reflects the specialist knowledge that already exists in a place.
Taken together, it feels like the founder pipeline is expanding in more than one direction. There’s a wider range of people building businesses, a broader geographical spread of where those businesses are coming from, and greater specialism in what they’re building. This shift is encouraging, but it also changes the type of support those founders need.
The challenge
But as the founder pipeline becomes more specialised, the challenges facing those businesses are evolving too. Many founders are technically exceptional, but this can come at the expense of the commercial expertise needed to grow a business.
Indeed, this barrier doesn’t discriminate based purely on sector, but it’s in these specialised niches that it really stands out. The main gaps we see remain around networks, mentorship, market understanding and investment readiness.
Arguably, it’s in these areas where support programmes like PraeSeed are most helpful. Their role in combining skills development with capital and meaningful access to commercial talent makes the biggest difference.
Innovation and exceptional founders emerging from new avenues is an even greater reason to be excited by the North right now – more than the No.10 North opening. Recognising this, and ensuring that the funding and advice is adapting to meet their needs, is how we’ll best seize on the momentum in the region.