After more than ten years in operation, tech nationUK government-approved ecosystem builder for UK tech startups and growth tech companies to cease operations after losing its grant funding to a program run by Barclays Bank Eagle Laboratories.
The team behind the non-profit, which got most of its funding from the UK government, now plans to seek new backers and a new direction, after closing its doors on March 31, 2023. The program Tech Nation visas will continue immediately. finished.
In a statement, Tech Nation said: “With this foundation removed, Tech Nation’s remaining activities are not independently viable.”
However, its chief executive, Gerard Getch, said that Tech Nation is also “actively seeking interested parties to acquire its portfolio of assets to drive forward in a new way. We have fully explored whether Tech Nation could continue without core government grant funding, but have concluded after extensive consultation that this is not an option.”
He added: “We have a portfolio of Tech Nation assets and an internationally acclaimed brand, and we have already started discussions with mission-based organizations to take them forward. We are inviting expressions of interest from interested parties.”
The move comes at a time when the UK government has been paying lip service to the idea of the country as a “science and technology superpower”. a recent speech by the chancellor he saw him imploring businessmen to move to the UK:
“If anyone is thinking of starting or investing in a business focused on innovation or technology, I want them to do it here. I want the world’s tech entrepreneurs, life science innovators and green tech companies to come to the UK because it offers the best possible place to bring their visions to life,” he said.
However, the closure of Tech Nation and the rise of other initiatives abroad have left the UK rather short in the ‘encouraging innovation’ department.
Tech founders and investors are already being lured by the $369 billion on offer under the US Inflation Cut Act for tech startups. In the EU, states like France are increasing support for tech entrepreneurship. In fact, the state bank Bpifrance is pumping another 500 million euros in deep tech startups.
Meanwhile, in the UK, the government has cut the R&D tax credit scheme for start-ups. And in a survey of more than 250 UK founders by industry body Coadec, a majority said the cuts made the UK significantly less attractive.
TechCrunch understands that Tech Nation had previously approached the government, asking it to consider taking it over as a public body, but those talks went nowhere.
The Sunday Times had previously reported that government officials were concerned that Tech Nation was “violating state aid rules because it had failed to become self-sufficient,” prompting officials to bid on the contract earlier this year.
Tech Nation has long been embedded in the UK tech startup scene. Tech City UK, its predecessor, was launched in 2011 by former Prime Minister David Cameron and focused heavily on the London ecosystem until 2018 when it merged with Manchester-based Tech North. Since then, he has run countless programs connecting tech startups and scaling up with each other and with investors in the UK and abroad.
The organization claims it has helped make the UK Europe’s leading digital economy. While 80% of startups fail in their first 2-5 years, more than 95% of startups in Tech Nation’s accelerator programs have scaled up, he says. More than a third of all UK-created tech unicorns and decacorns have graduated from a Tech Nation programme, collectively raising more than £28bn so far in venture capital and equity markets. Alumni include Monzo, Revolut, Depop, Bloom & Wild, Zilch, Just Eat, Darktrace, Marshmallow, Ocado, Skyscanner, Peak AI, and Deliveroo. As a government-backed organisation, Tech Nation says it has earned a return of £15 for every £1 funded by the UK government.
Critics of the government’s decision to hand the contract over to Barclays say it will put it in a conflict of interest, such as the need to support startups in the fintech space that could compete with it. One said the government “effectively provided funds to Barclays to acquire new customers” and was a “potential competitor or customer of the new companies it should support.”
Many northern tech leaders had previously expressed dismay that Tech Nation would lose government support at this time in the economy.
“There is still a huge equity gap for Northern funders. Organizations like Tech Nation are effectively the connective tissue between what is ultimately still a nascent ecosystem on a global scale,” Ben Davies, director of group marketing at financial services firm Praetura, told the Prolific North.
Dan Sodergren, co-founder of Manchester-based people support platform Your FLOCK, said: “Without Tech Nation, we wouldn’t have the ecosystem outside of London that we do. They were also fundamental with programs like Libra, Net Zero net or Rising Stars. These things were happening long before the rest of the market.”
“Whatever you think of them, good or bad, the death of Tech Nation is the end of an era for the UK startup ecosystem. The idea of the government as a provider of start-up advice for founders backed by Tier 1 VCs is finished. We have to make sure that any aid now reflects the needs of the future, not those of the past; That means keeping the good stuff intact, like a well-known visa offer, and having the government focus on creating the best environment for tech startups, with extra support going to those who need it most, not those who probably can. find it anyway,” said Dom Hallas, Executive Director of Guide.
