Tech Nation forced into fire sale of assets after UK funding withdrawn
Tech Nation, the British group once believed to be pivotal in efforts to create a British start-up scene capable of competing with Silicon Valley, was forced into a fire sale of its remaining assets after Rishi Sunak’s government sold its funding stopped.
The group was set up by the government in 2014 to boost the UK tech industry through ‘growth schemes’ for start-ups and processing visas for expatriate staff. A third of Britain’s tech “unicorns” have since gone through its development programs, including Deliveroo, Monzo and Revolut.
But last month the government withdrew a £12million grant from the group and instead gave the money to Barclays Bank, forcing Tech Nation to shut down.
The move came just months after Tech Nation considered but ultimately turned down lucrative deals with Middle Eastern governments, according to two people with knowledge of the offers and a company document seen by the Financial Times.
With no external funding, business groups and technology organizations have been invited to submit bids for their intellectual property and other assets before the February 14 deadline. The sale includes brands such as Future Fifty, a program to support late-stage tech startups,
Founders Forum, the entrepreneur networking group set up by lastminute.com founder Brent Hoberman, is among more than 30 organizations that have expressed interest in bidding for some assets, according to people familiar with the process. Some groups, such as the London Business School, considered offers but decided against them.
Tech Nation’s demise comes after its funding dwindled in recent years, chief executive Gerard Grech told the FT, and despite the government’s stated ambitions to build a “science superpower”.
“I am certain [Barclays] will do their best with the scholarship,” said Grech. “I just think whatever the government says, they have to balance their own rhetoric with policies and support mechanisms that really, really help the ecosystem.”
Funding constraints prompted Tech Nation to look at other options to fill a £6m funding gap before announcing its closure.
Last autumn it was close to signing a £2.63million deal with the Saudi Arabian government in support of future Saudi unicorns and another £2million deal was focused, according to a company document viewed by the FT.
It has also joined with the Dubai government in a £500,000 proposal to help British companies and venture capital firms expand in the Middle East, according to the document. The governments of Dubai and Saudi Arabia did not respond to requests for comment.
“We decided against it [proceed with the contracts] because we have focused on the UK tech ecosystem,” said Grech.
He added that efforts to find alternative private sector funding had failed, while an offer to become a public entity and become state-owned was turned down.
Tech Nation will continue to operate a visa processing program for technical staff on behalf of the UK Home Office until the end of March.
Tech groups, including lobby group Coadec, are in early talks with the Home Office on how to move the visa program forward. The Home Office said applications were “unaffected” while it investigates “long-term changes” to the system.
https://www.ft.com/content/c8e1119d-2436-48f5-9d02-6f59ce1e5179 Tech Nation forced into fire sale of assets after UK funding withdrawn