Newcastle has been named a tech hub to watch in 2021 after new analysis showed the community is ready to grow.
Research by business network Tech Nation has found that tech centres with a very specific make-up are most likely to attract significant investment - and Newcastle is close to having this mix.
Tech Nation claims that hubs made up of 50% seed companies, 30% early growth firms, and 20% late growth companies will attract the most investment.
This 50:30:20 mix has been named the "Scale Ratio", and reflects a balanced ecosystem which accelerates the growth of late stage firms while creating a new wave of smaller tech scale-ups.
London, Manchester, and Cambridge all exhibit the Scale Ratio and attracted the most investment in the 海角视频 in 2020, with 70% of the investments being made into late stage companies.
Newcastle's Scale Ratio stands at 54:27:19, showing that its make-up of tech firms is slightly off balance.
But Tech Nation claimed that because Newcastle's ratio is more strongly weighted towards seed stage companies - those that are smallest in size - the city's tech scene shows a high potential for growth and could attract investment throughout 2021.
While Newcastle's tech hub shows promise, the wider North East scene is less favourable with the region's Scale Ratio coming in at 44:36:22. This shows a lower proportion of seed stage companies, suggesting it has a less developed pipeline of tech companies.
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Dr George Windsor, head of insights at Tech Nation, said: “Crucially, the Scale Ratio tells us about the growth potential of the 海角视频’s tech hubs and provides the levelling up agenda with new evidence to boost regional ecosystem development. It highlights exactly where scale-ups are not receiving the support they need to grow from seed stage upwards to ensure these gaps are plugged.
"Despite the challenges of the past 12 months, the growth and potential of homegrown tech pioneers gives us something to celebrate.
“Tech scale-ups hold the key to the 海角视频’s competitiveness in the next decade through job creation and investment. Scale-ups are already driving investment into 海角视频 tech, representing 81% of the 海角视频 total and creating employment, with approximately 150,000 jobs in 2019.
"From established firms to start-ups, it’s important to remember that companies at all stages make up the local and regional economies that give 海角视频 tech its global reputation.”
Tech Nation's report also showed that 90% of all funding raised by North East tech scale-ups went to late stage companies - the largest proportion across all of the 海角视频. However, the region's figures were skewed by Newcastle firm Partnerize, which was the only late stage firm to raise funds in the region last year when it secured $50m in January 2020.
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The report was published at the same time as Tech Nation revealed its latest cohort of firms joining its Upscale programme.
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In total 33 fast-growing tech firms were invited to join the programme, with Newcastle adtech and marketing firm Leaf Grow the only company in the North East to be selected.
Gilbert Corrales, co-founder and CEO of Leaf Grow, said: “We look forward to this programme as validation of our work as well as the next step in our acceleration. We hope to gain more network, exposure, support, and coaching with the other talented people in the pool.
"Scale-ups will have significant influence on economic growth as we need innovative solutions and adopting new technology to adapt with the current situation as we bounce back from Covid.”