For years, London has held its position as the nucleus of Britain’s startup activity. Its dense investor network, access to early adopters, and international appeal made it the natural first choice for talent. But that dynamic is shifting — and not just because of the pandemic.
British startups are increasingly looking beyond the capital to build their teams, not as a cost-cutting tactic, but as a strategic decision grounded in talent, sustainability, and retention.
Banked: Building a fintech team across regions
Banked, the London-based payments startup, began decentralising its hiring model in 2021. Instead of concentrating its development team in the capital, it expanded into cities like Bristol and Glasgow, focusing on remote-first collaboration supported by occasional travel.
The results have been telling. CTO Paul Hargreaves noted that hiring from outside London allowed the company to tap into talent that might otherwise be priced out of the capital — or uninterested in relocating. With property costs and commute times removed from the equation, Banked saw increased employee satisfaction and better retention across technical roles.
The firm’s success suggests that London-based startups can still maintain a central identity while drawing talent from across the UK — if the operating model supports it.
The Sheffield startup scene: A quiet resurgence
Cities like Sheffield and Newcastle have become fertile ground for early-stage startups, particularly in sectors like edtech, clean energy, and advanced manufacturing. The University of Sheffield’s Advanced Manufacturing Research Centre has spun out several commercially viable startups in the last five years, attracting technical founders and graduate talent who choose to remain in the region.
Startups such as Tribosonics — which develops sensor technology for industrial applications — have leveraged local academic partnerships to fuel R&D while hiring locally. Their growth story has shown that meaningful innovation doesn’t require a Zone 1 postcode.
Hiring regionally has also helped these firms build loyalty. In interviews conducted by Tech Nation in 2023, regional founders cited stronger community ties and lower turnover among hires outside the capital — particularly among experienced professionals with roots in their local area.
The appeal of second cities for senior hires
It’s not just junior talent or technical roles. An increasing number of senior professionals are relocating or remaining in cities like Manchester, Cardiff, and Edinburgh for lifestyle reasons — and startups are adapting.
In 2024, a Leeds-based healthtech startup appointed a new CFO who had previously led finance at a London digital pharmacy. The executive declined relocation and continued in the role remotely, visiting the office twice per month. Rather than treating this as a limitation, the leadership team integrated travel into quarterly planning and built a hybrid leadership rhythm. The flexibility proved to be a selling point for other experienced hires, too.
As startups mature and professionalise, access to seasoned leadership becomes critical. Startups willing to meet that talent where it lives — rather than insisting on a central HQ model — are at a growing advantage.
Challenges remain
This shift is not without friction. Some founders express concern over alignment, culture-building, and regulatory complexity when hiring across multiple UK jurisdictions. Others cite the limitations of local infrastructure or the difficulty of coordinating hybrid teams across time zones and regions.
But the counterpoint is compelling. Distributed hiring widens the pool, supports regional economic growth, and aligns with the increasing expectation of flexibility — not just in hours, but in geography.
A broader talent narrative
If British startups are to remain globally competitive, they will need to solve problems beyond product and capital. Talent — how it is sourced, supported, and retained — is now central to long-term resilience.
Hiring outside London is not a rejection of the capital’s advantages. It is a recognition that the future of work is less about location and more about leverage. Startups that learn to operate beyond old boundaries may find they grow in ways traditional models never allowed.