Tech Nation to shut down after losing government funding
Image credit: Technation (CEO photo), with background from Dreamstime. Edit by Beatriz Valero
Tech Nation, the UK organisation that supports technology start-ups, has announced it will cease operations on 31 March.
Tech Nation has explained its planned closure is as a direct result of the government's decision to stop providing the organisation with £12m in grant funding, and award it instead to Barclays Bank.
With this foundation removed, Tech Nation’s remaining activities are "not viable on a standalone basis", the organisation said in a statement.
Founded in 2010, Tech Nation has worked with nearly a third of the UK’s 122 unicorns and supported the rise of companies such as Monzo, Revolut, Ocado, Skyscanner and Deliveroo. The company also run the UK’s global tech talent visa, in collaboration with the UK Home Office.
Although Tech Nation was never a government organisation, it heavily relied on government funding to continue its operations.
In September last year, it was reported that the UK’s Department for Digital, Culture, Media and Sport (DCMS) had decided to give the £12m Digital Growth Grant to Barclays Eagle Labs, the start-up incubator division of the FTSE 100 bank.
As a result, Tech Nation confirmed it would shut down on 31 March 2023.
In a statement announcing the closure, the organisation said it will be ceasing all existing operations "through a carefully planned wind-down" and announced it has commenced redundancy proceedings for its 70 employees. The company also revealed it is actively seeking interested parties to acquire its portfolio of assets.
“Tech Nation is a purpose-led organisation, with a mission to serve the UK’s tech ecosystem,” CEO Gerard Grech said. “By delivering services and insights impartially across Britain, Tech Nation has made a huge and positive impact on the UK’s digital economy.
"The UK now boasts over 20 places with one tech unicorn or more, five times what it was in 2014."
Barclays’ tech incubator Eagle Labs will use the government grant – which has been awarded for just two years – to launch new programmes to help tech companies.
It will not, however, take over Tech Nation’s role in administering the UK’s global talent visa, designed to help founders and tech workers to move to the UK to start and join high-growth businesses.
“We have supported Tech Nation since 2017 to accelerate the growth of start-ups and scale-ups across the UK," a DCMS spokesperson said. “Our decision to make the Digital Growth Grant competitive brings the funding into line with the majority of government grants.
"Barclays Eagle Labs was successful because their application represented the best value for taxpayers’ money, will benefit the most start-ups and scale-ups over the next two years, and was scored highest by an independent panel.”
The government's decision has sparked criticism from the UK start-up community, with 400 entrepreneurs signing an open letter calling on the government to rethink its decision, since it was first announced
"Start-ups and scale-ups have been and should be the drivers of the British growth story in the years to come – in order to reach the ecosystem's full potential – we ask that you provide the help and support we need," the letter reads.
Tom Adeyoola, the founder of Metail, told Shifted: "Whilst I believe strongly in competition and positive change, I think we should reflect on a grant cycle that is incredibly short and precarious. Barclays Eagle Labs may well have only just got their infrastructure in place by the time they are themselves up for renewal."
In a landscape where 80 per cent of start-ups fail within their first two to five years, Tech Nation has stressed that over 95 per cent of start-ups on its accelerator programmes has gone on to scale, collectively raising over £28bn so far in venture capital and capital markets.
“For every pound invested in Tech Nation, we have returned £15," Grech said. “I am grateful to the government’s support over nine years, and feel proud of all we achieved. It has been an incredible journey.
“Together we have made the UK tech economy a global powerhouse for tech talent and now third in the world for tech investment, after the US and China.”
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