The UK’s start-up scene is at a crossroads – and the West Midlands may be feeling the squeeze hardest of all.
According to new data from Dealroom, British start-ups raised just £16.2 billion in 2024 – the lowest figure since the pandemic and a fraction of the £65 billion raised by their US counterparts.
With access to capital tightening, founders are increasingly packing up and heading across the Atlantic in search of funding, growth and opportunity.
Several start-ups, including AI unicorn ElevenLabs, have already incorporated in the US.
Others, like Cleo and Sequel, say UK capital simply isn’t deep or bold enough to sustain scaling businesses – with American investors more willing to take risks and move quickly.
But while London still captures headlines, the impact is even more acute in regions like the West Midlands, where early-stage founders already face an uphill battle securing seed funding, attracting investors or accessing growth capital.
‘Without capital, the potential remains just that: potential’
The region has long championed its talent and innovation credentials – from Birmingham’s tech corridor to Coventry’s engineering clusters – but without capital, the potential remains just that: potential.
It’s a worrying pattern. The West Midlands has nurtured high-potential founders and brilliant ideas but lacks the investment ecosystem to keep them here.
As US cities like Miami and San Francisco beckon with cheque books and risk-hungry investors, local firms are faced with a stark choice: stay and struggle or leave and scale.
Unless policymakers act fast – unlocking pension funds, incentivising VC activity outside of London and rethinking capital gains tax policy – the UK risks becoming a launchpad for talent that ends up fuelling someone else’s economy.
And for the West Midlands, if we don’t act fast, the question is no longer if we’ll lose our brightest start-ups but how many.
