Is the South Wales tech market stagnating?

Over the last decade, South Wales has made strides in becoming a hub for tech talent, innovation and digital infrastructure. But recently, something’s shifted and if you’re hiring in the region, you’ve probably noticed it too.
 
There just aren’t as many new tech start-ups emerging as there used to be
 
While established companies in Cardiff, Newport and Swansea are still growing (albeit cautiously), the grassroots innovation that once drove much of South Wales’ tech buzz appears to be slowing down.
 

Where have all the start-ups gone?

Several factors may be at play:
 

• Reduced early-stage funding: Seed and pre-seed investment into Welsh tech firms dropped in 2024, with the number of first-time raises down by over 30% compared to pre-pandemic levels.
• Fewer university spinouts: Despite strong institutions like Cardiff University and Swansea University, spinout activity in Wales lags behind the South East and Midlands.
• Talent bottlenecks: Smaller companies are finding it increasingly difficult to compete with larger employers on salary, flexibility and stability – making it harder to build founding teams.
• Post-COVID caution: Entrepreneurs are holding back. With high interest rates and limited safety nets, fewer are taking the plunge to build something new.

What does this mean for hiring managers?

If you’re struggling to fill mid-level and senior IT roles – you’re not alone. The pipeline of new talent from fast-growth companies (which often act as training grounds) is thinner. Candidates are gravitating toward stable employers with clear progression paths and competitive benefits, rather than risky early-stage ventures.
 
And that puts pressure on you as an employer to create opportunities that feel just as exciting and meaningful as a start-up would have.
 

Strategy matters more than ever

In a slower market, success isn’t just about filling roles, it’s about doing it with purpose.
 
Having the right hiring strategy in place can help you:
 

• Build sustainable tech teams
• Improve retention
• Attract candidates who align with your mission – not just your tech stack

 
That’s where IntaPeople comes in. We partner with South Wales tech companies to develop and deliver hiring strategies that actually work – based on local market data, real candidate insight and deep sector experience.
 
Whether you’re scaling cautiously or planning for future growth, we can help you position your business as a destination for top tech talent.
 
Worried your hiring approach isn’t cutting through?
 
Let’s chat. We’ll help you create a tech hiring strategy that’s fit for today’s market – and tomorrow’s challenges.