UK technology growth platform Tech Nation will cease operations and seek to transfer its assets following termination of its core government grant funding. In a statement, Tech Nation said that, after a decade of supporting and transforming the UK’s scaleup tech ecosystem, it will be closing its doors from March 31, 2023. This is a result of the firm’s chief funding from the Department for Digital, Culture, Media & Sport (DCMS) being awarded to Barclays Bank’s tech incubator Eagle Labs.
With this foundation removed, Tech Nation’s remaining activities are not viable on a standalone basis, it stated. Tech Nation was established in 2011 and has since run dozens of accelerator programmes designed to help UK tech startups and scaleups grow and expand internationally. This includes Tech Nation Cyber, a national scaleup programme for the UK cybersecurity sector.
Tech Nation claims to have supported more than 5,000 companies, processed over 6,000 Global Talent Visa applications and contributed £600 million of Gross Value Add to the UK economy since 2014. Cybersecurity companies who are alumni include Darktrace.
Tech Nation “not viable” without vital government funding
In a post on its website, Tech Nation stated that it has exhaustively explored whether it could continue without core government grant funding, but has concluded, after extensive consultation, that this is not an option. It will therefore cease operations when its current DCMS contract concludes in late March. “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.”
Furthermore, continuing without core funding would compromise Tech Nation’s status as a public interest company, it added. “We are a non-profit, with an obligation to act in the best interest of the public and the scaleup community we serve. We cannot continue to deliver for scaleups impactfully and impartially without core public funding underpinning everything we do, and with commercial funding alone.”
Tech Nation is commencing a redundancy consultation process for all permanent employees. It has also started discussions with mission-based organisations to take its portfolio of assets and brand forward, with interested parties invited to submit Expressions of Interest until February 14, 2023.
More than 400 entrepreneurs have signed an open letter calling on the government to rethink its decision to award the grant to Barclays.
Tech Nation helped make the UK a global “powerhouse for tech”
Commenting on the news, Gerard Grech, Tech Nation founding CEO, championed Tech Nation’s achievements in serving the UK’s tech ecosystem. “The UK now boasts over 20 places with one tech unicorn or more, five times what it was in 2014,” he said. “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. We have helped champion and support innovators in everything from AI to FinTech to Climate tech and more.” Together Tech Nation has helped to make the UK tech economy a global powerhouse for tech talent and now third in the world for tech investment, after the US and China, he added.
Impact of Tech Nation’s closure on the UK’s cybersecurity sector
Several UK-based security leaders have spoken to CSO about the potential impact of Tech Nation’s impending closure on the UK’s cybersecurity sector.
“Tech Nation Cyber has been instrumental in offering peer-to-peer guidance and mentoring to create a supportive environment for technology entrepreneurs where they can find the resources and support they need to grow and succeed,” says Leo Cunningham, CISO at women’s health app Flo. “Closing its doors is a sad day for cybersecurity entrepreneurs/startups and a way for cyber experts to contribute to scaling cyber companies beyond the UK.”
The closure pulls many resources, such as workshops, events, mentorship opportunities, and access to a community of like-minded individuals, along with weakening UK growth for cybersecurity startups and incubated entities, Cunningham adds. “Tech Nation’s return on the UK economy, showcasing cyber talent and outside investment into scaling these companies, pays for itself. To pull the plug on this when the economy is in free fall sums up the current logic of the UK government and will leave us at a disadvantage.”
Whilst there is no doubt Tech Nation has made a positive impact over the last decade, the majority of similar, government-funded projects are expected to be self-funding over time, says Brian Higgins, security specialist at Comparitech. “The UK Cyber Security Council is a recent example. It’s a shame such a broad reaching resource like Tech Nation will be winding down but the incubator/accelerator, tech innovation space is dangerously overpopulated in the UK right now, so it’s no surprise DCMS has decided to partner with Barclays. They have an existing ecosystem with Eagle Labs and plenty of cash to keep things going once the government funds dry up.”
The best outcome from such a disappointing turn of events would be some kind of collaborative, centralized registry where cybersecurity/tech innovators and entrepreneurs could match available resources to their needs and aspirations, Higgins adds. “Unfortunately, that’s probably a little too difficult an ask.”
Jonathan Morgan, UK&I director at Armis, adds, “Tech Nation has seen some phenomenal success stories in its time and that torch will be carried on by the many other accelerator programmes that exist in the UK today. The UK has and always will be a diverse tech hub, not just in London, but Manchester, Cheltenham – particularly for cybersecurity – and Edinburgh as well.”
Tech Nation has been a great success for the UK tech industry over the last decade, so the impact of its closure will definitely be felt, says Javvad Malik, lead security awareness advocate at KnowBe4. “This is especially true of the cybersecurity industry, which forms a vital part of the tech world. Having locally developed and funded cybersecurity firms often means they are able to create products which are tailored to the local market and take into account local regulatory requirements and in line with the work culture of local organisations.”
If the UK is to stay ahead in cybersecurity, there needs to be well-funded and future forward accelerators that identify and nurture the most brilliant and innovative talent, says Rob Shand, chief resilience expert at Impact Resilience. “The loss of Tech Nation is a giant step backwards in the realm of cybersecurity and the security of our country.”
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