Tech Nation has announced that it will cease operations, after more than a decade supporting the UK’s startup ecosystem, following the loss of core funding to Barclays.
In January 2023, the Department of Digital, Culture, Media and Sport (DCMS) announced it had awarded its £12m Digital Growth Grant to Barclays’ startup incubator Eagle Labs, which is set to takeover from Tech Nation in administering the funding from the end of March onwards.
Many in the UK tech sector – including founders, executives and investors – have spoken out against the decision, 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”.
Tech Nation said that, as a direct result of the DCMS grant withdrawal, it will be ceasing all existing operations through a carefully planned wind-down, and has commenced a redundancy consultation process for employees.
It added that it is also actively looking for interested parties to acquire its portfolio of assets to take forward under a new guise.
“We have exhaustively explored whether Tech Nation could continue without core government grant funding, but have concluded after extensive consultation that this is not an option,” it said in a press release. “Firstly, because it is not viable for critical mass and impact. The work we do with our accelerator programs, insights and research reports, the Growth Platform, visa processing for the Home Office, and so much more, has all been built on the foundation of our core grant funding from DCMS.
“With this foundation removed, Tech Nation’s remaining activities are not viable on a standalone basis and the unique Tech Nation model that we have built upon this foundation can no longer be supported.”
Tech Nation said the Home Office had been notified of its plans to cease operations, but that it would continue running its Global Talent visa programme in the immediate term. In the year to September 2022, 2,560 visas were granted under this route.
“We are working closely with Tech Nation to ensure continuity of the digitech strand of the Global Talent visa in the short term, whilst we explore the long-term changes necessary in light of Tech Nation’s planned closure,” said a Home Office spokesperson. “We will also take every available step to ensure that applicants already part of the Global Talent route are not disadvantaged by the closure, so the UK can continue to benefit from the brightest and best living and working here.”
Gerard Grech, founding CEO of Tech Nation, added that the firm has had a “huge positive impact” on the UK’s digital economy.
“Many of Britain’s most successful tech companies, from Monzo to Deliveroo, and from Skyscanner to Darktrace, have passed through one or more of Tech Nation’s growth programs,” he said. “We have helped champion and support innovators in everything from AI [artficial intelligence] to fintech to climate tech and more. In doing so, we have helped spread digital growth and jobs nationwide. For every pound invested in Tech Nation, we have returned £15.
“I want to express my sincere thanks and gratitude to the Tech Nation team, to our ecosystem partners and all the inspirational innovators and entrepreneurs we have worked with along the way,” said Grech. “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.”
Commenting on the shuttering, a DCMS spokesperson said the department has supported Tech Nation since 2017 to accelerate the growth of startups and scaleups across the UK.
“Our decision to make the Digital Growth Grant competitive brings the funding into line with the majority of government grants,” they said. “Barclays Eagle Labs was successful because their application represented the best value for taxpayers’ money, will benefit the most startups and scaleups over the next two years, and was scored highest by an independent panel. We are committed to supporting Tech Nation until March 2023.”