Startup Wales – the Welsh Tech Ecosystem
Today we are publishing our first report examining Wales’ startup ecosystem. The report uses in-depth interviews with startups to explore their experiences starting and scaling startups in Wales and what challenges they have faced.
The report identifies six central challenges for Welsh startups, including:
Investment: Startups wanted access to more diverse investment routes. Founders were also concerned that public funds, such as the Development Bank of Wales, dominated the funding landscape.
Connectivity: The Covid-19 pandemic normalised and accelerated trends towards more hybrid and remote working. Founders felt Wales’s startup ecosystem – with beautiful landscapes and a low cost of living – was well positioned to capitalise on this, as long as Wales improved its physical infrastructure and broadband.
Isolation: Founders said they were crying out for access to more hubs and coworking spaces to build networks and swap advice and experiences.
Vision: Many founders felt the Welsh Government should provide more of a long-term tech vision. Founders felt that, in some cases, a laudable attempt to be equitable across Wales’ regions and sectors has meant resources are diverted from the areas where Wales has genuine opportunities to become global leaders. One stakeholder who was deeply embedded in the ecosystem and works regularly with the Welsh Government described its support as being, in their words, “faddy”.
Talent: While Wales can be good at training homegrown talent, many founders identified brain-drain as a serious issue. In one conversation, a founder said retaining local talent had become so difficult that, when asked where Wales’ greatest opportunities lay, they remarked “Liverpool, Birmingham, Bristol.”
This report concludes with eight recommendations for the Welsh Government to develop targeted support to the startup ecosystem:
Broaden the entry requirements to Angels Invest Wales and more actively flag the network at home and abroad.
Establish a programme that backs the creation of more venture builders.
Commit to supporting and expanding regional co-investment funds.
Launch a review into how Government funding can be leveraged to provide better engagement with startups.
Invest in new coworking spaces that can act as hubs for startups to access advice and guidance.
Consider how to further leverage enabling remote working as a draw for more startups to base themselves in Wales.
Launch a review into the state of Welsh university spinouts, considering how to better support the commercialisation of Welsh research.
Create more trade envoys that champion specific Welsh tech sectors and review the current Business Diaspora Strategy to better promote tech startups.