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UK Pulls Plug On Top Tech Incubator After Setting Out To Become ‘worlds Next Silicon Valley’

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UK Pulls Plug On Top Tech Incubator After Setting Out To Become ‘worlds Next Silicon Valley’

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UK Pulls Plug On Top Tech Incubator After Setting Out To Become 'worlds Next Silicon Valley'
  • TechNation announced Tuesday that its technology accelerator program will close its doors on March 31.
  • The UK government has transferred funding for the project to Barclays Bank's start-up incubation arm.
  • The move calls into question Britain's ambitions to become the 'world's next Silicon Valley'.

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TechNation, the UK's startup accelerator program, is to close its doors after failing to renew government funding, the organization said on Tuesday.

The technology industry body said in a statement that it "will close all existing operations through carefully planned closures and initiate a consultation process for additional operations."

The group is "actively seeking entities interested in moving forward with the new coverage and looking to acquire its portfolio of assets," he said.

TechNation, launched by former Prime Minister David Cameron in 2010, was Britain's attempt to create multibillion-dollar global technology companies and compete with Silicon Valley.

He says it helped him make a name for himself in the UK tech scene with a number of alumni working on projects such as Monzo, Revlot, Deliveroo, Just Eat, Darktrax and Ocado.

According to TechNation, more than a third of the tech unicorns and decacorns created in the UK have graduated from the TechNation scheme. Tech Nation alumni have also raised more than £28 billion ($35.4 billion) in funding to date.

While 80% of startups fail within the first two to five years, more than 95% of startups in TechNation's Accelerate program retire, according to the group.

Earlier this month, the Department for Digital, Culture, Media and Sport awarded its £12.09 million Digital Growth Grant to Barclays Bank. The lender's incubator Eagle Labs, which operates independently of Barclays, will replace TechNation as the prize.

The Sunday Times reported that the government tendered the deal last year after concerns that TechNation had "breached state aid rules by failing to support itself".

According to TechNation, DCMS funding will account for 62 percent of 2021-22 funding. The remaining revenue comes from sponsorships, business partnerships and other government contracts.

In his move, Tech Nation said that what it was doing now was "not viable" and therefore should be closed.

TechNation is in talks with Barclays Bank to transfer staff to the lender, whose main job is to provide government services.

The Home Office has been notified of the move, and the visa program for foreign tech workers will "resume immediately," TechNation said.

"Since 2017, we have been supporting TechNation to accelerate the growth of startups and scale-ups in the UK," a DCMS spokesperson told CNBC in an email.

“Our decision is to make the Digital Growth Grant competitive with most other government grants. Barclays Eagle Labs was successful because their application represented the best value for taxpayers and benefited most startups and large corporations. The next two times. years and was the highest achieved by an independent commission.

A DCMS spokesperson added, "We are committed to supporting Tech Nation until March 2023."

The next Silicon Valley?

The move calls into question Britain's desire to revive its global digital leadership after leaving the EU. A few days ago, Home Secretary Jeremy Hunt spoke of the UK's potential to become "the world's next Silicon Valley".

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" As an entrepreneur and digital champion, I have seen the impact that TechNation has had in creating one of the most exciting and dynamic parts of our economy," Martha Lane Fox, founder of lastminute.com and current chair of British Chambers, said in a statement on Tuesday.

"The skills that equipped entrepreneurs and the opportunities they created are unparalleled. They will be missed."

It adds to the woes of the UK's tech sector, which is currently suffering from a global slowdown in venture capital funding amid fears of a looming recession.

Britain is the only advanced economy in the 2023 deal, the International Monetary Fund said on Tuesday. Even embargoed Russia is expected to grow.

"The UK tech ecosystem has lost a key member of its community today," said Russ Shaw, founder of UK technology network Tech London Advocates.

In the year Total VC funding for UK startups in 2022 was $29.9 billion, down 27% from $41 billion last year. That's down 33 percent from $359.6 billion in 2021.

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The next one is coming.

The next one is coming.

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