The equity market for UK-based private companies is taking off and while the golden triangle between London, Oxford and Cambridge is often seen as the heart of the country’s innovation and deeptech creativity, there are some exciting initiatives happening further west.

Vertical Aerospace, a five-year-old, electric aircraft developer based in the south-west in Bristol, has agreed to go public by merging with the special purpose acquisition company (Spac) Broadstone Acquisition at an implied valuation of $2.2bn.

Microsoft’s M12 corporate venturing unit along with flight operator American Airlines, plane leasing company Avolon, industrial group Honeywell, and jet engine maker Rolls-Royce are all investing through the Spac to raise $394m for Vertical.

In addition, American Airlines and Avolon are launch customers for up to 1,000 aircraft with additional options for Virgin Atlantic.

The founder and CEO of Vertical, Stephen Fitzpatrick, is also founder, CEO and largest shareholder of Bristol-based Ovo Energy, which offers consumers plans for 100% green electricity. In February 2019, Mitsubishi acquired a fifth of Ovo, valuing the company at $1.4bn.

Separately, Bristol is rapidly expanding with Immersive Labs, a local cybersecurity skills platform, recently raising $75m in a series C round including banks Goldman Sachs and Citi’s corporate venturing units, while artificial intelligence chip designer Graphcore’s $222m E round in December came at a reported $2.8bn valuation.

Behind many of these local success stories lies SETsquared, a partnership to support entrepreneurs from the region’s main universities since 2002.

Independent research carried out by Warwick Economics estimated the economic impact of SETsquared-supported companies at £8.6bn (more than $10bn), with the creation of 20,000 jobs. These 4,000 entrepreneurs have raised £1.8bn and by 2030 their economic impact on the region is set to grow to £26.9bn.

And while the south west has been historically a small part of the UK’s overall equity growth over the past few years, the latest rounds will seen its impact only increase in future.

The state-owned British Business Bank said the south west represented 5% of the record £8.8bn of equity invested in the UK last year.

Editor’s note: SETsquared is a partner for the next GCV Symposium on 3-4 November and a select group of startups and scale-ups will be presenting.

James Mawson

James Mawson is founder and chief executive of Global Venturing.