Tech Nation, one of Europe’s most iconic ecosystem builders, has shut down after more than 10 years in operation. The nonprofit, which received the majority of its backing from the UK government, lost its grant funding to a programme run by Barclays Bank Eagle Labs, and its closure has sent shock waves through the startup community.
Tech Nation has been an influential part of building the UK’s vibrant tech startup scene. Tech City UK, its predecessor, was launched in 2011 by former prime minister David Cameron and concentrated largely on the London ecosystem until 2018 when it merged with Tech North. It’s played an important role in the growth of game-changing founders, leaders and scaling companies so that they can transform how societies and economies operate. It has provided companies from across the UK, from Glasgow to Belfast and from Liverpool to London with the coaching, content and community they need for their journey.
In a statement earlier this week, Tech Nation said: “With this foundation removed, Tech Nation’s remaining activities are not viable on a standalone basis.”
While it’s widely acknowledged that 80% of startups fail within their first two-five years, over 95% of startups on Tech Nation’s accelerator programs have gone on to grow. Further, more than a third of all tech unicorns and deacorns created in the UK have come from a Tech Nation programme, raising over £28 billion so far in venture capital and capital markets. Alumni include Monzo, Revolut, Depop, Bloom & Wild, Zilch, Just Eat, Darktrace, Marshmallow, Ocado, Skyscanner, Peak AI and Deliveroo.
Dan Sodergren, co-founder of people support platform Your FLOCK, based in Manchester said: “Without Tech Nation, we would not have the ecosystem outside of London that we have. They also were fundamental with programmes like Libra, Net Zero net or Rising Stars. These things were happening way before the rest of the market.”
The foundation has also played a key role in connecting global tech talent through its Visa scheme – and with Brexit continuing to linger, there are concerns now growing about the future of talent in the UK’s entrepreneurial workforce.
Speaking on the closure, chief executive Gerard Grech said: “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.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 these forward. We are inviting Expressions of Interest from interested parties.”
The UK government’s decision to revoke the grant leaves a dark cloud over the future of the country’s tech and startup community and raises many questions about what the wider impact will be.
For young professionals and tech startups in the UK, the closure of Tech Nation is likely to be pretty worrying. It creates questions about what the future of the UK’s startup ecosystem will be, concerns over talent acquisition and visa issues will arise, and it creates a pretty unsettling atmosphere. As we see it, the key concerns are:
- Visa Processes: Tech Nation was supporting the process of assessing visa applications for skilled workers in the tech sector. Without it, delays and uncertainty are likely to be felt. Amidst ties of a global talent shortage, and existing Visa issues coming from Brexit, the Visa issue could hit hard. Tech Nation supported over 6000 visa applications.
- Startups Lose Support: Tech Nation gave us the likes of Revolut, Zilch, Skyscanner and Deliveroo. It’s supported by over 5000 companies and 13000 jobs have been created thanks to its intervention. It gave support, resources and networking opportunities for startups and was a strong sign of governmental commitment to supporting the startup community, betting on it for economic growth and prosperity. Without the support, UK-based startups will now have to find different avenues.
- Decline of UK tech? The UK tech industry is strong and it’s certainly one of Europe’s powerhouses. London is a global capital, looked to as a reference point for tech development and business acumen. Tech Nation helped promote this and was a key advocate for the UK’s tech industry on an international level. Without it, visibility is likely to decrease.
The closure of Tech Nation certainly casts doubt over the UK’s commitment to tech startups – which is in contrast to other European governments where we see big funds and initiatives being launched to back impactful innovation. In France, for example, La French Tech is growing strong and Macron has affirmed mega-euros to GreenTech innovation. It also comes despite the government actively seeking skilled talent to come to the UK.
Chancellor Jeremy Hunt: “If anyone is thinking of starting or investing in an innovation or technology-centred business, 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 make their visions happen.”
One glimmer of hope is that the UK has a very well-established tech and startup community. It has been a European hub of entrepreneurial development for decades, and that’s not something that is likely to change overnight. The country has a rich business heritage, and London is still home to some of the biggest and fastest-growing companies. It’s still a powerhouse.
Despite this sad news, we can expect that the startup and tech ecosystem can continue to grow, evolve and even thrive – even without Tech Nation. It’s also likely another initiative will emerge.