Tech Nation, the UK industry body set up in 2014 to help tech entrepreneurs grow their businesses, has announced it will be forced to close following the UK government’s decision to withdraw crucial funding.
The announcement, published yesterday afternoon, began as follows:
“After a decade as a government-backed organization serving the UK’s scaling technology ecosystem, we are today announcing that Tech Nation will close its doors from March 31, 2023. The Tech Nation’s DCMS grant core funding is awarded to Barclays Bank.With this foundation removed, Tech Nation’s remaining operations are not viable on a stand-alone basis.
“As a direct result of the withdrawal of the DCMS grant, Tech Nation will cease all existing operations through a carefully planned liquidation and has begun a redundancy consultation process. Tech Nation is also actively seeking interested parties to acquire its portfolio of assets. to take forward in a new form.”
The non-profit organization was set up to promote British technology. This involved providing support to founders through coaching, networking, education, specific accelerators for AI-, cyber- and fintech-focused companies, managing the global tech talent visa program and the publication of research.
Tech Nation has been very successful in helping UK tech companies grow and attract tech talent to the UK. More than 95% of start-ups nurtured by Tech Nation acceleration programs have gone on to grow, and more than a third of tech unicorns and decacorns created in the UK have graduated from a Tech Nation program. Its alumni include very familiar names such as Ocado, Depop, Bloom & Wild, Just Eat, Darktrace and Peak AI.
The organization claims in its statement that for every pound paid in by UK taxpayers, it issues a return of £15.
Indeed, the success of Britain’s technology, valued at $1 billion and employing 4.8 million people, has been hailed in recent speeches by the Prime Minister and Chancellor of the Exchequer as a great British achievement and a essential part of the British economy. . Jeremy Hunt even checked the names of Tech Nation Monzo and Revolut graduates in his speech to Bloomberg on the 27th.e January, as an example of the UK’s “world-class fintech sector”.
Given Tech Nation’s demonstrable success, it’s not clear why the DCMS chose to award the £12.09m digital growth grant to Barclays Eagle Labs. A statement posted on the DCMS website states:
“The Digital Growth Grant was awarded following an open competition and rigorous evaluation process. Barclays Eagle Labs’ bid represented the best value for taxpayers’ money, as the 100% of the grant will be allocated to support the UK technology ecosystem, with Eagle Labs absorbing all operational aspects and human costs associated with running the business programme.
“This will allow Eagle Labs to launch new programs to grow technology businesses and expand access to existing Eagle Labs services. The funding will double the number of mentoring sessions offered to tech companies to 1,500 per year.
“The independent panel evaluating the applications concluded that Eagle Labs was ideally placed to provide targeted support across the country. A bespoke regional partnership program will ensure funding and training reflect the challenges digital businesses face in their region.
Tech entrepreneurs and VCs greeted the news of Tech Nation’s closure with dismay.
Ekaterina Almasque, General Partner of the European VC OpenOcean, said: “It’s a tough day for the UK tech industry. Tech Nation was founded to lead the UK digital industry at the height of the Silicon Roundabout. So it’s a disturbing sign of the times that this body, which has overseen growth programs for start-ups, digital academies and international expansion efforts, has been forced to close its doors.
“The loss of Tech Nation will deprive current and future entrepreneurs of an important network for the UK tech industry. Making these connections is so crucial for start-ups in their early days of growth. It can help a business to secure funding, find talented employees, or simply share ideas with industry peers.
“If the UK government wants to transform the UK into a new Silicon Valley, industry needs grassroots support. ensure that continuous progress is made. Many countries around the world are making these efforts to support their tech economy. The UK must do the same if it wants to avoid falling behind its peers.
“It’s not enough to simply create brand plans with ‘Silicon’. We need to make sure we have the right processes in place to bring talented founders with innovative software ideas, from ideas on a whiteboard to stock quotes on Piccadilly Square.”
A DCMS spokesperson said:
“We have been supporting Tech Nation since 2017 to accelerate the growth of startups and scale-ups across the UK.
“Our decision to make the Digital Growth Grant competitive aligns funding with the majority of government grants. Barclays Eagle Labs was successful because their application represented the best value for taxpayer dollars, will benefit startups the most and scale-ups over the next two years, and was awarded the highest rating by an independent panel.
“We are committed to supporting Tech Nation through March 2023.”