Investment Landscape in Gloucestershire and the South West
The South West of England continues to see strong investment activity, despite broader economic challenges. According to the techSPARK Annual Investment Report 2024, the region raised £587 million in equity investment, demonstrating resilience and adaptability in a shifting financial landscape.
Among the standout areas for growth, Gloucestershire emerged as one of the fastest-growing investment hubs, securing £145 million across 33 companies. This positions the county as the second-highest recipient of funding in the South West, trailing only the West of England (Bristol & Bath), which raised £279 million.
Investment Trends in the South West
Gloucestershire’s success reflects several key investment trends in the region:
· Larger Deal Sizes: Gloucestershire’s average deal size of £4.53 million surpasses the regional average.
· Sector Shifts: While Information & Communication and Professional, Scientific & Technical Activity remain dominant, there has been increased number of deals this year in Wholesale and Manufacturing.
· Sustainability-Focused Funding: Investment in Greentech and Net Zero initiatives reached £100 million, supporting companies tackling the climate crisis.
· A Shift Away from Early-Stage Funding: In 2018, 60% of investment went to seed-stage companies, whereas by 2023, this had dropped to 41%, reflecting investors’ preference for businesses with proven sustainable growth strategies.
Case Study: Kubus
A prime example of Gloucestershire’s thriving tech sector is Kubus, a Cirencester-based technology value-added reseller (VAR). In October 2024, Kubus secured a £9 million investment from BGF to accelerate its global expansion and enhance service offerings.
Founded in 2003, Kubus specialises in IT infrastructure solutions, focusing on networking, server and storage infrastructure, and cybersecurity. The company collaborates with industry leaders such as Juniper Networks, Cisco, Dell, Fortinet, and Pentera, establishing a reputation for delivering high-quality products and services to blue-chip businesses and public sector organisations worldwide.
Addressing the South West Cybersecurity Investment Gap
Despite Gloucestershire’s investment successes, the region faces a critical gap in cybersecurity funding. The county is home to the highest concentration of cybersecurity firms outside London, yet it receives less than 1% of the UK’s cyber investment. This disparity, particularly in early-stage funding, creates a significant barrier for cybersecurity startups, preventing them from securing the vital capital needed to develop products, build teams, and scale operations. Many promising companies are left struggling to get off the ground or are forced to relocate to areas with more accessible capital.
To address this gap, CyNam has launched an investor engagement programme, co-funded by Innovate UK, the Department for Science, Innovation and Technology (DSIT) and Barclays Eagle Labs. This initiative aims to:
· Lay the Foundations for an Angel Investor Network: Cultivating a dedicated group of investors focused on early-stage cybersecurity and emerging technology firms in Gloucestershire.
· Educate Potential Investors: Providing resources and training to demystify the cybersecurity sector, enabling informed investment decisions.
· Foster Collaboration: Connecting investors, entrepreneurs, and industry experts to stimulate innovation within the region.
By addressing these challenges, CyNam hopes to unlock substantial funding opportunities for cybersecurity and deep tech startups, ensuring they have the necessary capital to scale and thrive locally. The initiative is poised to tackle the early-stage funding gap, empowering startups to grow and contribute to Gloucestershire’s expanding cybersecurity ecosystem.
Implications for Gloucestershire’s Economy
Gloucestershire’s strategic proximity to GCHQ and the development of Golden Valley position it as a burgeoning UK cybersecurity hub. However, the current investment gap threatens to push promising startups to relocate to regions with more accessible capital, undermining the local ecosystem.
Initiatives like CyNam’s investor engagement project are critical to retaining these businesses within Gloucestershire. By fostering investment in early-stage cybersecurity firms, CyNam is helping to secure long-term economic growth, job creation, and the continued development of Gloucestershire as a national leader in cyber innovation.
Looking Ahead
As Gloucestershire continues to build momentum, it is poised to attract increased investment in deep tech and cybersecurity. Key drivers for future growth include:
· Creation of Cybersecurity Investment Networks: Encouraging more investors to engage with local startups.
· Development of Golden Valley: Establishing a global hub for cyber innovation.
· Attraction of National and International Investors: Drawing diverse funding sources into the region’s deep tech and cybersecurity sectors.
With the right investment ecosystem in place, Gloucestershire is set to become a major player in the global digital and security economy, offering abundant opportunities for entrepreneurs, investors, and technology leaders.