The next Silicon Valley? Tech Nation will shut down after the UK withdraws funding

Traffic passes around the Old Street Roundabout, also referred to as the “Silicon Roundabout”, in the area known as the “Technical City” of London, UK

Chris Ratcliffe | bloomberg | Getty Images

Tech Nation, the UK’s startup accelerator programme, has announced it is set to close after failing to renew its funding from the government.

The tech industry body said in a statement that it would “discontinue all current operations through a carefully planned cool-down process and have begun a redundancy consultation process.”

It added that the group was “actively seeking interested parties to acquire its portfolio of assets to move forward in a new guise”.

Created in 2010 under former Prime Minister David Cameron, Tech Nation has been a hallmark of the UK’s drive to create multi-billion dollar tech companies of global significance and rival the likes of Silicon Valley.

It claims to have helped spawn household names in the UK tech scene, with a diverse group of alumni on its projects including the likes of Monzo, Revolut and DeliverooAnd just eatAnd Dark Trace And Ocado.

According to Tech Nation, more than a third of all tech unicorns and decathlons created in the UK have graduated from the Tech Nation programme. Tech Nation alumni have also raised over £28 billion ($35.4 billion) in funding to date.

The group said that while 80% of startups fail in the first two to five years, more than 95% of startups in Tech Nation’s accelerator programs have scaled.

Earlier this month, the Department for Digital, Culture, Media and Sport awarded a £12.09m digital growth grant to Barclays Bank. The lender’s Eagle Labs incubator, which operates independently of Barclays, is set to replace Tech Nation as the grant recipient.

The government put the contract to tender last year after it raised concerns that Tech Nation was breaching state aid rules after failing to become ‘self-sufficient’, The Sunday Times reports. mentioned.

Tech Nation says the DCMS scholarship accounted for approximately 62% of its funding in 2021/22. The rest of her income came from sponsorships, business partnerships, and other government contracts.

As a result of the move, Tech Nation said its current activities were “not viable on a standalone basis” and would therefore need to be terminated.

For employees whose primary role is to provide government services, Tech Nation has begun discussions with Barclays about turning these workers over to the lender.

The Home Office has been notified of the move, Tech Nation said, and its visa program for foreign tech workers will continue “in the near term.”

The next Silicon Valley?

The move has raised questions about the UK’s ambitions to increase its digital leadership on the global stage post-Brexit from the European Union. A few days ago, Chancellor of the Exchequer Jeremy Hunt spoke of the UK’s chances of becoming a “The next Silicon Valley in the world. “

As an entrepreneur and digital champion, I have seen firsthand the impact Tech Nation has had in creating one of the most exciting and dynamic parts of our economy,” Martha Lane Fox, founder of and current chair of the British Chambers of Commerce, said in a statement on Tuesday.

“The skills they provided entrepreneurs with and the opportunities they presented were unparalleled. They will be missed.”

It also adds to the woes of the UK’s technology sector, which is currently experiencing a global slump in venture capital funding amid fears of an upcoming recession.

On Tuesday, the International Monetary Fund He said The UK was the only one of all the developed economies that was on track for a contraction in 2023. Sanctions-hit Russia is expected to grow.

“Today the UK tech ecosystem has lost a valuable member of its community,” said Ross Shaw, founder of Tech London Advocates, the UK’s tech network.

Venture capital funding for startups in the UK totaled $29.9 billion in 2022, down 27% from $41 billion a year earlier. Global startup investment fell to $233.3 billion, down 33% from $359.6 billion in 2021.

Leave a Comment