Tech Nation ‘working round clock to secure future’ after Govt strips it of £12m contract and awards it to Barclays
Start-up body Tech Nation said it is facing an existential crisis and was scrambling to secure funding for its future today, after the government stripped it of a major £12m government contract and handed it to Barclays.
The Department for Culture, Media and Sport (DCMS) confirmed it had handed the new tech deal to Barclays Eagle Labs in a controversial move that has irked much of the UK’s tech sector.
The move was first reported in September and has been roundly slammed by fintech and tech entrepreneurs, with a petition urging the government to reconsider now receiving over 400 signatories, including the co-founder of listed fintech firm Wise and start-up body Coadec.
The move is set to place significant sway over the tech and fintech sector in the hands of one of Britain’s biggest traditional lenders.
Minister for Tech and the Digital Economy, Paul Scully, said: “We want to unlock the potential of the next generation of start-ups and scale-ups and boost tech businesses in all corners of the country.”
“Barclays Eagle Labs are digital industry experts and will help tens of thousands of tech firms and founders to achieve their dreams and create jobs and economic growth.”
..we have been working around the clock to secure our future and continue delivering for UK scaleupsTech Nation
The news has been met with disappointment by Tech Nation’s CEO Gerard Grech, who told City A.M. today the organisation it is “pursuing various routes and evaluating the options available to us”.
The new contract raises questions over the future of TechNation, which was founded by the government almost a decade ago, as well as scores of jobs at the organisation.
In a statement issued after the announcement, the company said UK tech it now valued at more than $1tn and employs almost 5m people, with salaries 80 per cent higher than professional jobs.
TechNation also said it had helped secure the UK $30bn in private capital last year alone, which was double the nearest European challenger.
“Those we’ve accelerated have disproportionately thrived” with over 95 per cent of startups on its books having “gone to scale,” it said.
It added that 40 per cent of all UK tech unicorns and decacorns -firms valued at over £1bn and £10bn, respectively – have graduated from a Tech Nation growth programme, collectively raising over £28.1bn so far in venture capital and capital markets.
“13,000 jobs have been created nationwide as a direct result of our intervention,” Tech Nation said.
“In anticipation of the Government’s decision to award the Digital Growth Grant to another party, we have been working around the clock to secure our future and continue delivering for UK scaleups.
“It is essential that any route forward for Tech Nation ensures we are able to continue to act in the best interest of the tech community and put the needs of scaleups front and centre. This is the principle that has always guided us, and will guide our decision making over the next steps we take from here.”
Tech Nation CEO Gerard Grech told City A.M.: “We have been exploring various options, including being a commercially funded organisation, as well as exploring alternative funding from the government. We are currently pursuing various routes and evaluating the options available to us.
“What is absolutely essential to us, is that any route forward for Tech Nation ensures we are able to continue to act in the best interest of the tech community and put the needs of scaleups front and centre.
“This is the principle that has always guided us, and will guide our decision making over the next steps we take from here.”
Responding to the news, Amanda Allan, director of Barclays Eagle Labs, said its “vision is to make the UK tech sector an engine for growth and for the UK to be the best place in the world to start and grow a tech business.
“We’re excited to double down to reach more businesses across the country”.
According to the DCMS, Tech Nation will continue to deliver remaining grant funding until March 2023.