The Home Office says it is looking at options to “ensure the continuity” of the Global Talent tech visa scheme after administrating body Tech Nation announced it is shutting down at the end of March.
Tech Nation will cease operations after it lost out on its core government grant funding to Barclay’s Eagle Labs. The tech industry body has been working for a decade helping to build an ecosystem for technology scale-ups and support entrepreneurs. The group says it is looking for someone to take over its assets and move forward in a new guise.
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As part of its work, Tech Nation was the vetting body for the digitech strand of the government’s Global Talent visa, which allows so-called “exceptional figures” to apply to live and work in the UK. Tech industry figures wishing to enter the country via this route have needed their application endorsed by Tech Nation.
In light of the organisation’s closure, a Home Office spokesperson said: “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.
“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.”
Tech Nation said it was unable to comment on what might happen after 31 March, but a spokesperson added that it had notified the Home Office of its decision to close.
Tech Nation programmes aided scale-ups
The non-profit ran dozens of accelerator programmes that were designed to help small tech companies from the UK grow and expand outside the country thanks to its foundation grant, which comes to an end next month. Government grants account for approximately 75% of Tech Nation’s income and so without the core grant from the Department for Digital, Culture, Media and Sport (DCMS) it says its remaining activities are not viable on a standalone basis.
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“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,” a spokesperson said.
“Furthermore, continuing without core funding would compromise our status as a Public Interest company,” the statement continued. “We are a non-profit, with an obligation to act in the best interest of the public and the scale-up community we serve. We cannot continue to deliver for scale-ups impactfully and impartially without core public funding underpinning everything we do, and with commercial funding alone.”
Formed from the merger of Tech City UK and Tech North, Tech Nation had a network of conferences, sandboxes, panels, research, analysis and a digital academy to help entrepreneurs get their companies from beyond small start-ups to viable businesses. It helped drive the UK tech sector to be the number one in Europe and third globally, worth an estimated $1trn and employing five million people across the country.
Tech Nation’s focus on scale-ups
It focused on accelerating scale-up growth as these create 90% of UK tech jobs and drive investment and productivity improvements. In a statement on its closing, Tech Nation said the market for start-up support has matured but there is still no single organisation focused on tech scale-ups. “We are proud that the scale-ups Tech Nation supported over the decade have disproportionately thrived,” a spokesperson exclaimed.
“While 80% of start-ups fail within their first 2-5 years, more than 95% of start-ups on Tech Nation’s accelerator programs have gone on to scale,” it wrote in a statement. “More than a third of all tech unicorns and decacorns created in the UK have graduated from a Tech Nation program, collectively raising over £28bn so far in venture capital and capital markets.” Its alumni include Monzo, Revolut, Depop, Just Eat, Ocado, Skyscanner and Deliveroo.
Gerard Grech, Founding CEO, Tech Nation said in a statement that “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”. Adding: “We have helped champion and support innovators in everything from AI to FinTech to Climate tech and more. In doing so, we have helped spread digital growth and jobs nation-wide. For every pound invested in Tech Nation, we have returned £15.”
News that it would be losing its government funding was first reported last year, leading to 415 tech industry figures signing an open letter calling for the decision to be reconsidered. Support for growing tech businesses “should be grounded in the start-up ecosystem and local ecosystems across the country – not looking to ride on its coattails,” the letter said, describing the decision to hand the funding to Barclays as “alarming”.
Eagle Labs takes over business support programmes
It was confirmed last week that Eagle Labs network would take on the role of supporting entrepreneurs from April. It will now receive the £12m Digital Growth Grant previously used by Tech Nation and provide services to support the same types of groups. This is something Eagle Labs was already doing through its own growth programs via its branches.
Tech Nation has started a redundancy process for permanent employees, and for those involved in the DCMS-funded work they are in discussions with Barclay’s Bank over the potential transfer of employees.
The agency has warned that to become a global superpower in science and technology, and the “most innovative country in the world”, as declared by Prime Minister Rishi Sunak in recent speeches “it is vital that government rhetoric is now paired with policies and support mechanisms to match”.
Stephen Kelly, chair of Tech Nation said: “Having been at the controls in the cockpit growing start-ups and scale-ups to multi-billion dollar, global market leaders from both Silicon Valley and the UK, I have personally witnessed the power of Tech Nation’s impact and community in shaping this golden decade for UK Tech. Tech Nation has become the masterclass and finishing school for UK scale-up founders to build future global market leaders and is the envy of governments around the world”.
Tech Nation will cease operations on 31 March 2023, with Barclays Eagle Labs taking over the DCMS-contracted work from 1 April.
