UK startup founders tell IT Pro they have lingering concerns about the future of industry support as Tech Nation’s closure date approaches. The industry champion confirmed last month it will close its doors on 31 March after a vital government funding package was awarded to Barclays Eagle Labs.
The decision to award the £12 million Digital Growth grant to Eagle Labs sparked consternation across the UK startup scene, with some voicing concerns over the future of the tech visa scheme and the organisation’s range of growth programmes.
The Financial Times (FT) reported in February that Tech Nation had been forced into a ‘fire sale’ of intellectual property. This included programmes led by the organisation, with around 30 organisations believed to have placed bids, including Founders Forum, a networking group established by British entrepreneur, Brent Hoberman, co-founder of lastminute.com
Tech Nation runs a number of growth schemes aimed at supporting founders and startups spanning several areas. To date, hundreds of startups have passed through the Future Fifty, Applied AI, Cyber, FinTech, Rising Stars, and Upscale programmes, for instance.
A key factor in the popularity of these schemes, founders tell IT Pro, was they offered valuable support for startups and founders to fine tune their product offerings, broaden horizons, and enable them to engage with a broad pool of like-minded founders and startups operating across the country.
A sad day for UK startup support
Jim Wilkinson, CEO of Zuto, a North West-based startup which participated in the Future Fifty 11.0 cohort describes Tech Nation as having been a “key part” of the UK technology ecosystem for nearly a decade, and one that’s provided vital support for startups and scale-ups.
“Tech Nation over the years has supported a huge number of innovative tech businesses across the UK and helped contribute to the thriving ecosystem we now have,” he says. “The UK is full of SMBs and, particularly in the North West, we have a strong culture of supporting startups, which Tech Nation was a key champion of.”
The Future Fifty 11.0 cohort, unveiled in September last year, features 13 high-growth potential businesses. Zuto was one of two firms from the North West selected to take part in the scheme.
Wilkinson (pictured) says Tech Nation was a key champion of sustaining a strong culture of support for startups in the North West
“I, and Zuto, feel a personal loss too, as our experience and opportunity is sadly going to be cut short. Tech Nation provided support, training and networking among many other things to bring together like-minded businesses to help make things happen," he adds.
Rob Straathof, CEO and co-founder of Liberis, an embedded finance company that was part of the Future Fifty 9.0 cohort, also tells IT Pro that Tech Nation’s loss will be felt across the UK industry due to the crucial role it played in championing UK tech.
“As a member of Tech Nation’s Future Fifty 9.0 cohort, we have benefited greatly from its network, their insights into helping startups growing into scale-ups, and the connections with other founders and CEOs who can provide information mentorship and guidance, as well as their continuous battle to put FinTech on the radar of the government,” he says.
“Tech Nation previously had the ability to push for simple but effective solutions such as the Visa for tech workers, helping to expand companies abroad with advice and practical guides, as well as support with local PR, marketing, and legal and compliance.”
Regional startups could suffer
Damian Fairbrother Jones, COO at AeroCloud, another North West-based startup that took part in the Rising Stars 3.0 programme, believes the closure of Tech Nation will hamper startups operating outside of London and the South East.
“For us, Tech Nation plays an important role in championing and recognising tech ecosystems outside of London,” he says.
Fairbrother Jones (pictured) feels Tach Nation's loss will hamper startups and SMBs outside of London
“Pulling the plug on Tech Nation will leave a significant gap in the venture capital ecosystem. As a big corporate, it will be hard for Barclays to replicate the ‘insider’ feel that Tech Nation created and the way in which it provides practical resources and approaches.”
Rich Arundel, co-founder and chief evangelist at Currencycloud, echoes Fairbrother Jones’ comments, suggesting the government’s decision to overlook Tech Nation sends a poor message and appears to contradict recent government posturing around support for the tech industry and turning Britain into the ‘next Silicon Valley’.
“Tech Nation was a signal that the government was committed to supporting the ambition and idealism of UK startups in the early 2010s. Questions around the impartiality of Barclays Eagle Labs aside, I think pulling the plug on Tech Nation has gone down so badly because it sends the opposite signal. Tech Nation’s effectiveness, its London-centricity, and its suitability for a now mature UK tech ecosystem were all debatable,” he says.
“But many entrepreneurs feel we need more startup networks, more support, and more investment – not less. Was there not a case for visionary reform? The Chancellor has recently been making overtures to the UK’s entrepreneurial community, pledging to turn the country into the next Silicon Valley. Now, he’ll face an uphill battle to win back their trust.”
It’s unfair to write off Eagle Labs
Although Tech Nation’s closure has justifiably raised concerns among UK startup founders, the situation might not be as dire as some suggest.
Amanda Brock, CEO of OpenUK, said at the time of Tech Nation’s announcement that the shift to Eagle Labs could mark a positive change for how startups are supported across the UK, noting businesses will still be able to access tailored advice and support.
“That’s a shift in model which I think will make a big difference and can only be perceived as positive,” she said. “Their existing programmes and mentoring opportunities will be expanded to a broader group and also will add further services including an accelerator and scale-up programme. This should really support startups at scale and contribute to the overall ecosystem where a rising tide lifts all boats.”
Eagle Labs represented better value for money, according to the government
Brock added that the new model will “build on the services” Tech Nation has traditionally provided and likely create a more localised framework for regional business support.
“I believe that this will be a step forward, with a free offering to startups which has been missing,” she continued. “Barclays offers a breadth of access across the Regions due to its existing growth programmes across the UK in 50 locations and these span Scotland, Cardiff and Belfast as well as a strong Regional presence. I understand that this will double and that their goal is for 80% of the startups being supported to be outside London.”
Despite concerns over the future of UK startup support, a pervasive mood of optimism still remains among founders. In recent weeks, Eagle Labs has been vocal about future plans and is engaging closely with industry stakeholders to ensure the hand-over benefits businesses.
Last month, David Hamilton, head of implementation at Barclays Eagle Labs, told UKTN the incubator has been portrayed as ‘bogeyman’ following the Digital Growth Grant funding announcement. Hamilton insists Eagle Labs was committed to continuing support for UK startups. The organisation also recently announced it will match the £12 million grant with £24 million of its own funding, and plans to launch additional programmes in the year ahead.
