UK Startups

Starting Up in Greater Manchester: What the Data Says About Funding and AI in 2026

Equity investment in the North West rose 82% in 2025, and Greater Manchester's AI sector was valued at $4.7 billion in June 2026. Here is what the evidence supports, and where Manchester founders can look for finance.

By Entrepreneur Group · Published 2 August 2026 · Updated 27 October 2026

Editor's note: updated on 27 October 2026. An earlier version used unverified figures for ecosystem growth, graduate retention and investor numbers; they have been removed.

Greater Manchester is one of the strongest places to build a startup outside London, and the funding data backs that up. Equity investment in the North West rose 82% in value in 2025, one of the three fastest increases of any UK region, according to the British Business Bank's Small Business Equity Tracker 2026. The Bank's earlier Nations and Regions Tracker also named Greater Manchester among the city regions with positive equity investment performance in 2024.

That does not mean every founder in the city will find funding easily. Percentage rises from a smaller base can be driven by a few large deals, and London still accounts for 57% of UK smaller-business equity investment by value.

The AI cluster

Greater Manchester's AI sector was valued at $4.7 billion in 2026, up 9%, according to Dealroom data published by Invest Manchester on 9 June. Other figures from the same release:

• almost $1 billion of AI investment in the city region since 2010;
• 59 AI fundraisings totalling $167 million in the previous 18 months;
• 5,744 people employed by AI companies, and around 13,500 AI professionals in the region overall;
• first place, for the second year running, in the SAS AI Cities Index as the UK's most AI-ready city outside London.

Councillor Bev Craig, leader of Manchester City Council, said: "Our AI sector has not emerged by chance."

These are promotional figures from the region's inward investment agency, based on Dealroom data. They are useful, but they are not official statistics.

Where to look for finance

• Northern Powerhouse Investment Fund II: a £660 million British Business Bank fund covering the North West, North East and Yorkshire and the Humber. According to Innovate UK Business Connect, it offers smaller loans of £25,000 to £100,000, debt of £100,000 to £2 million, and equity of up to £5 million. Applications are open all year.
• Bank lending: the Nations and Regions Tracker found long-term lending per person in the North West was consistently above the UK average.
• Start Up Loans: £500 to £25,000 at a fixed 7.5%, for businesses trading less than 60 months.
• Angel networks: the Regional Angels Programme backs angel groups outside the most concentrated markets.

What founders should weigh up

This section is editorial guidance.

Location is one factor among many. When deciding where to build, consider:

• Customers: are your buyers nearby, or could you sell to them from anywhere?
• Talent: Manchester's universities and growing AI and digital workforce are a real draw for technical hiring.
• Costs: office space and salaries are usually lower than in London, which can stretch your runway.
• Networks: sector groups, accelerators and university commercialisation teams can make introductions to customers and investors.

Manchester does not need inflated statistics. The evidence supports a clear conclusion: it is a growing, credible place to build, especially in AI and digital, with dedicated regional finance available.

Frequently asked questions

Is Manchester good for startups?

Greater Manchester is one of the UK's strongest startup locations outside London. North West equity investment rose 82% in 2025, and the city region's AI sector was valued at $4.7 billion in 2026.

What funding is available for businesses in the North West?

Options include the £660 million Northern Powerhouse Investment Fund II, which offers loans from £25,000 to £2 million and equity up to £5 million, as well as Start Up Loans, bank lending and regional angel networks.

How much is Manchester's AI sector worth?

Greater Manchester's AI sector was valued at $4.7 billion in 2026, according to Dealroom data published by Invest Manchester.

Sources

1. British Business Bank: Small Business Equity Tracker 2026 (reviewed 27 October 2026)
2. British Business Bank: Nations and Regions Tracker 2025 (reviewed 27 October 2026)
3. Invest Manchester: Greater Manchester's AI sector hits $4.7bn (9 June 2026) (reviewed 27 October 2026)
4. Innovate UK Business Connect: British Business Bank Northern Powerhouse Investment Fund II (reviewed 27 October 2026)