Tech Nation looks for new home as UK government awards tech ecosystem contract to Barclays • TechCrunch

After more than a decade, Tech Nation, the UK government-sanctioned ecosystem builder for UK tech start-ups and growing tech companies, is shutting down after losing funding to a scheme led by Barclays Bank’s Eagle Labs.

The team at the non-profit, which receives most of its funding from the UK government, now plans to look for new funders and new management after it closes on March 31, 2023. The Tech Nation visa program will continue soon.

Tech Nation said in a statement: “Excluding this foundation, Tech Nation’s remaining businesses are not viable on a standalone basis.”

However, its managing director Gerard Getch said Tech Nation is “also actively seeking interested parties to acquire a portfolio of assets to move forward in a new form.” We have extensively researched whether or not Tech Nation could operate without major government funding, but after extensive consultation, we have concluded that this is not possible.

He added: “We have Tech Nation’s portfolio of assets and an internationally recognized brand, and we have entered into discussions with mission-driven organizations to take them forward. We invite expressions of interest from interested parties. »

The move comes at a time when the UK government is touting the idea of ​​the country as a “science and technology superpower”. A recent speech by the Chancellor saw him plead with entrepreneurs to move to the UK:

“If anyone is thinking of starting or investing in an innovation or technology-based business, I want them to do it here. I want tech entrepreneurs, life science innovators and green tech companies from all over the world to come to the UK because it offers the best place to realize their visions,” he said.

However, the closure of Tech Nation and the rise of other foreign initiatives has left the UK very thin in the ‘inspiring innovation’ department.

Tech founders and investors are being lured by the $369 billion the US Tax Relief Act provides for tech startups. In the EU, countries such as France are increasing support for technological entrepreneurship. Indeed, state-owned bank Bpifrance is pouring an additional €500 million into deep tech startups.

At the same time, in the UK, the government has reduced the R&D tax credit scheme for start-ups. In a survey of more than 250 UK founders by industry body Coadec, the majority said the cuts did not make the UK significantly attractive.

TechCrunch understands that Tech Nation has reached out to the government and asked them to consider adopting it as a public body, but these talks have been unsuccessful.

The Sunday Times previously reported that government officials feared Tech Nation would “breach state aid rules because it was not self-sustaining”, leading officials to call for deals earlier this year.

Tech Nation has a long history in the UK tech startup scene. Tech City UK, its predecessor, was launched by former Prime Minister David Cameron in 2011 and focused mainly on the London ecosystem until 2018 when it merged with Tech North (based in Manchester). Since then, it has gone on to run a number of programs connecting tech start-ups and scaling with each other and with investors in the UK and abroad.
The organization claims to have helped Britain become Europe’s leading digital economy. While 80% of startups fail within the first 2-5 years, more than 95% of startups in Tech Nation’s accelerator programs scale, he says. More than a third of all tech unicorns and decacorns created in the UK have graduated from Tech Nation, raising more than £28 billion in venture capital and capital markets to date. 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 claims to have generated £15 in profit for every pound funded by the UK government.

Critics say the government’s decision to award the contract to Barclays puts it in a conflict of interest, as does the need to support startups in the fintech space that could compete with it. One said the government had “provided Barclays with lucrative funding to acquire new clients” and was “a potential competitor or customer to the start-ups it should support”.

Many northern tech leaders have previously expressed concern that Tech Nation will lose government support at this point in the economy.

“There is still such an equity gap for northern financiers. Organizations like Tech Nation are the connective tissue between what is still a nascent ecosystem on a global scale,” Ben Davies, group marketing director at financial services firm Praetura, told Prolific North.

Dan Sodergren, founder of Manchester-based people support platform Your FLOCK, said: “Without Tech Nation, we wouldn’t have an ecosystem outside of London. They were also fundamental with programs like Libra, Net Zero net or Rising Stars. These conditions occurred long before the rest of the market.

“Whether you think it or not, Tech Nation’s demise marks the end of an era for the UK startup ecosystem. The idea of ​​a government giving startup advice to founders backed by Tier 1 VCs is over. We need to make sure any aid now reflects the needs of the future, not the past – and that means keeping good things like the established visa offer and ensuring the government focuses on creating the best environment for tech start-ups with extra funding. support is given to those who need it most, not those who can find it anyway,” said Dom Hallas, Coadec’s executive director.