The capital continues to lead the UK’s entrepreneurship scoreboard

London has traditionally been the top UK region for entrepreneurship and continues to lead across all metrics by a significant margin. London accounts for over a quarter of all high growth companies in the UK, with 1,529 out of a total 4,110.

While London continues to lead the rest of the UK, it has not been left untouched by larger fluctuations in the entrepreneurial environment. The number of companies backed by private equity has declined slightly year-on-year, from 208 to 204. However, the ratio of private equity-backed companies to all companies (0.38), is the highest in the country and it also has the highest overall number of private equity-backed companies.

London also leads when it comes to the number of companies with venture capital and expansion funding, at 89 and 66 respectively. In fitting with the national trend, VC funding has declined year-on-year, but the number of companies with expansion funding has increased in the same time period, up from 62 to 66.

1,529: Number of high-growth companies
£742m: Amount of expansion funding invested

This pattern tracks closely with the amount of funding available in London. Venture capital funding dropped from £219 million in 2015 to just £102 million in 2016. Again, expansion funding was higher, drastically increasing from £332 million in 2015 to £742 million in 2016.

Despite the more tumultuous national entrepreneurship environment, London remains a strong rock of entrepreneurship nationally. However, it’s positive to see regions such as the North West and Scotland attracting more entrepreneurial activity, diversifying the enterprise scene outside of the capital.

Key findings

National data offers a conflicted snapshot of entrepreneurship, while regional data proffers a promise of diversifying new business activity. London and the South East remain strong incubators, and the North’s entrepreneurial growth is strong. 

Entrepreneurs index

A barometer of the entrepreneurial environment and activity in the UK. This, the ninth volume, focuses on three main indicators: start-up activity, growth of new business and exits of young enterprises.