Why Cambridge Is The Place To Be For Start-Ups And Scale-Ups

Forbes

11-06-2025

More start-ups make it to seed stage in Cambridge than anywhere else
Where should you locate your start-up business to give it the best possible chance of making the jump from seed status to Series A? New data from Dealroom suggests the UK's Cambridge is your best bet, with more businesses in the university city making the transition from start-up to scale-up than in any other prominent hub for entrepreneurship.
Dealroom's analysis reveals that, on average, 41% of seed-round start-ups in Cambridge make it to a Series A round; that compares with only 35% of similar businesses in Cambridge's arch-rival Oxford, and only 33% in London. To put Cambridge's performance into perspective, the equivalent figure for the Bay area in the US is 40%.
Cambridge's start-ups and scale-ups raised $2.3 billion of new funding last year, Dealroom's figures show. That was the city's second-best year ever – with fund raising almost doubling compared to 2023's figure of $1.2 billion.
The success of businesses in the city is even more impressive in the context of a difficult environment for fund raising elsewhere in Europe. While London-based start-ups and scale-ups raised $11.3 billion last year, that was down 12% on 2023. Leading continental European hubs such as Stockholm and Berlin also saw fund raising fall back.
Venture capital investors appear to have focused on locations with a high proportion of technology businesses. Oxford-based businesses also managed to attract more funding, with investment in the city up 1% to $706 million. Zurich managed a 5% increase in funding, taking the total amount of money raised in the Swiss city last year to $990 million.
Nevertheless, Cambridge's ecosystem of start-ups and scale-ups increasingly stands out in Europe. Dealroom values the city's technology sector at $222 billion – more valuable than in any city in the UK other than London. 'Cambridge continues to be a shining example in the European ecosystem, at the heart of a new Palo Alto with its deep scientific and technological research heritage,' says Yoram Wijngaarde, founder of Dealroom.
Clearly, the city has certain natural advantages, including the scientific prowess of its university and the proximity of role-model global technology companies such as Arm, Wayve and Quantinuum. However, those active in the city's start-up community argue that businesses have also benefited from a broad range of entrepreneurial support aimed at building the next generation of such companies.
'To get more venture scientists to break-out stage, we need to back them with the right support, from mentoring and business development to funding,' says Gerard Grech, the managing director of Founders at the University of Cambridge, which runs an accelerator programme in partnership with Cambridge Enterprise, the university's innovation arm. 'We're making sure they have what they need to build the deep tech companies that will shape our future.'
Wijngaarde agrees. 'Cambridge it cannot rest on its laurels,' he warns. "The Cambridge ecosystem needs to continue to grow and mature to improve the rate at which companies reach unicorn and exit stage so that it can remain globally competitive.'
The good news in this regard is that 2025 has already seen a number of notable fund-raising rounds from university spin-outs. Electric vehicle charging specialist Nyobolt raised $30 million in new funding in April, while the engineering business Cambridge GaN Devices picked up $32 million in February.
Professor Dame Clare Grey, co-founder and chief scientist at Nyobolt, says she wants to see other businesses from the city follow in its footsteps. 'Cambridge provides unparalleled foundations for deep tech ventures with its unique international networks and expertise,' she says. 'We must maintain focus on our ultimate mission: transforming breakthrough science into scalable solutions that tackle universal challenges, particularly those that ensure a more sustainable future for all.'