The UK government has awarded Barclays Eagle Labs a £12m digital growth grant to support technology startups and scaleups across the UK, replacing longstanding provider Tech Nation in the role.
The Digital Growth Grant funding was established by the Department of Digital, Culture, Media and Sport (DCMS) to support the development of the UK’s tech sector and help existing technology businesses scale. The cash will be split over two years, and was awarded through an open competition and assessment process.
The role of Tech Nation, which previously administered the funding and relies on government grants for 75% of its income, will be phased out in March 2023 and replaced by Eagle Labs, a startup incubator run by Barclays.
The grant award confirms reports from September 2022, which revealed that Eagle Labs was in line to receive the funding, and which prompted 140 tech founders, executives and investors to sign an open letter arguing that, “Providers of government-backed support should be grounded in the startup ecosystem and local ecosystems across the country – not looking to ride on its coat tails.”
While the signatories said they support the evolution of the ecosystem, they “are concerned that this change risks throwing out the baby with the bathwater – and in this moment of crisis, the message this sends about what government thinks of the sector is damning.”
Responding to its loss of funding, Tech Nation said: “In anticipation of the government’s decision to award the Digital Growth Grant to another party, we have been working around the clock to secure our future and continue delivering for UK scaleups. It is essential that any route forward for Tech Nation ensures we are able to continue to act in the best interest of the tech community and put the needs of scaleups front and centre. This is the principle that has always guided us, and will guide our decision making over the next steps we take from here.”
Tech Nation added it has supported the growth more than 5,000 startups; delivered £15 return on every £1 invested by the UK government; contributed £600m of added value to the UK economy since 2014; and created 13,000 jobs. It further added that 40% of all UK unicorns (businesses valued at over $1bn) graduated from a Tech Nation growth programme, and that its alumni have collectively raised a total of £28.1bn in funding.
DCMS confirmed that other government funding received by Tech Nation, including for its role in securing visas for founders, will not be affected by the decision to award the grant to Eagle Labs. It further claimed that combined investment from the government and Eagle Labs, which already provides growth and support programmes from 38 of its branches across the country, will support more than 22,000 businesses, at least 80% of which are based outside London.
“We want to unlock the potential of the next generation of startups and scaleups and boost tech businesses in all corners of the country,” said Paul Scully, minister for tech and the digital economy. “Barclays Eagle Labs are digital industry experts and will help tens of thousands of tech firms and founders to achieve their dreams and create jobs and economic growth.”
According to DCMS,, the grant will help Eagle Labs to fund training resources and opportunities for entrepreneurs; provide specialist support for founders from underserved communities; and set up effective local networks to support tech businesses where ever they are located. It added the grant will also allow Eagle Labs to launch new services and grow existing ones, with the funding expected to double the number of mentoring sessions offered to tech firms to 1,500 a year.
“Eagle Labs’ vision is to make the UK tech sector an engine for growth and for the UK to be the best place in the world to start and grow a tech business,” said Amanda Allan, director of Eagle Labs.
“Through the Digital Growth Grant, we’re excited to double down to reach more businesses across the country with our best-in-class business growth programmes and bespoke regional support. We have a track record of supporting over 8000 startups and high-growth businesses since we launched in 2015 and we’re proud that, due to our established Eagle Labs network, we can pass through all grant funds to our delivery partners and programmes, helping to maximise the impact of the grant in supporting the UK tech ecosystem.”