TECH NATION: The South Wales cities of Cardiff, Swansea and Newport form an emerging startup cluster that is helping to replace jobs lost from the region’s old industries. How is the cluster faring? Neil Cocker, founder of Dizzyjam and Cardiff Start, gives us his honest inside view.
The industrial past of South Wales is well known. Tiger Bay was once home to the busiest docks in the world, exporting coal and steel from the area to the world. And the surrounding valleys contain one of the world’s best-known coalfields, exploited for centuries by the mining industry.
But now, the Welsh economy is looking to another sector for growth. Led by specialisms in sports and health tech as well as data management, the digital companies springing up across the cluster are promising high returns.
This growth has not gone unnoticed: Cardiff is the fastest-growing core city in the UK, and is also the fastest-growing capital city in Europe. This is a far cry from the image of industrial decline from the late 20th Century. South Wales now has a renewed sense of confidence.
The South Wales cluster, as outlined in Tech City UK’s Tech Nation report, covers the neighbouring cities of Cardiff, Swansea and Newport, and accounts for a very large percentage of Wales’s economic activity.
Cardiff and Swansea share the advantages of a government very supportive of business, but connections between the two cities are still limited – meaning that startup support across the cluster is still driven locally. However, Cardiff does have very strong ties with both Newport and Caerphilly, which are both considered as being part of the capital city region, and growth is apparent across the board.
The reasons underpinning the economic renaissance of South Wales are easy to see. Cardiff has a vibrant community: ranked the number one city in the UK for quality of life, it boasts superb transport links, including a two-hour journey time to London by either road or rail.
The talent pool is of exceptional quality, with three universities and around 45,000 students in Cardiff alone. Combined with the low cost of overheads, this makes for a very attractive environment for startups. Its rapid growth provides a great opportunity for startups to grow and develop world-leading specialisms.
Veritii is a good example: a homegrown startup challenging the property market with its 3D house-viewing platform.
What South Wales is missing, however, is a tech legacy. There is no long-standing culture of tech ingrained into the collective consciousness here, and this is where other UK clusters have an advantage. One of the consequences of this is a scarcity of informed and experienced investors in the newly flourishing tech sector.
I started my own company, Dizzyjam, as a music merchandise company. It wasn’t until two years in that I realised that we weren’t a t-shirt or merchandise company, but an ecommerce platform that just happened to produce t-shirts.
Fresh out of the music industry, I was naïve to the business and revenue models in tech. There had been no one around, no sector community, to tell me that I had, in fact, started a tech company.
Business support in the region is often rather generic, and support platforms, just like investors, struggle to understand the needs of tech startups.
Hence Cardiff Start was born: an unfunded volunteer organisation to provide a community for tech companies in the Cardiff city region. We provide mentorship, business advice and meet-ups for those working in the tech community here. We have helped our members raise over £1m in equity investment.
We want to attract more tech-savvy investors. Many venture capitalists and angel investors in South Wales have a background in sectors such as property and find the idea of investing in tech startups rather daunting.
For the cluster to continue its strong growth trajectory, the ecosystem requires an increase in investors such as Smart Anchor Ventures, or Indycube Ventures, who not only provide funding, but also invaluable support and advice. We need investors who ‘get tech’.
And alongside Cardiff Start, organisations like TechHub in Swansea and WelshICE, a co-working space in Caerphilly, which is home to more than 85 early-stage companies, are working hard to provide targeted support for the thriving tech community here.
Running Cardiff Start has given me the opportunity to see the economic growth in South Wales first-hand. From edtech startups Noddlepod and Schoop, to payment solutions company PayZip, health tech start up Nudjed and innovative services startups Veeqo and Pwinty – the progress has been exceptional.
But it’s in the sports and health sectors I really see promise. With everything a sports person could possibly want, from a Ryder Cup golf course, Ashes cricket ground, and a Rugby World Cup stadium (pictured) to easy access to both the sea and mountains, South Wales is the perfect place for testing sports technology.
The growth of the region and government investment in the Life Sciences Hub and Research Centre on Cardiff Bay have provided a great opportunity for startups specialising in sports tech and health tech. I believe South Wales has the potential to be a world leader in these areas. But this is just the beginning – the overwhelming consensus is still that we need more input and investment from those who are older, wiser and richer.
Tech City UK’s view
Gerard Grech, CEO of Tech City UK, says the growth of the South Wales cluster over the last few years has been impressive to watch
“Many clusters draw on their cultural heritage to develop individual specialisms in the tech sector. South Wales is instead drawing on its geographical strengths – including the diverse environmental ecosystem and unique access to world-leading sports facilities – to lead in sports and health tech.
“Support organisations such as Cardiff Start and Welsh ICE are fostering an entrepreneurial culture that is vital to the development of a digital cluster – one of collaboration, mentoring and networking with the investor community. As part of our Tech City UK Cluster Alliance programme, we also work to accelerate this process by bringing the local digital businesses in South Wales, led by Neil, ever closer to the national network of influencers, investors and academia.”