Tech Nation Bytes The Dust: What Now For UK Tech?

The unexpected termination of Tech Nation's government funding raises doubts over the UK's ability to incubate tech firms, finds James O'Malley

- James O'Malley

"The more we innovate, the more we can grow our economy, create the high-paid jobs of the future, protect our security and improve lives across the country," said Prime Minister Rishi Sunak in March, as the government unveiled its science and technology plan. The idea was to turn Britain into a tech "superpower" - and came after Sunak reorganised his government to focus on tech, with the creation of a Department of Science, Innovation and Technology (DSIT).

So, it's strange that 31 March 2023 marked the final day of operation for Tech Nation, a non-profit founded in 2010 that had been tasked with helping Britain's most exciting tech firms scale up their businesses. Funded with a £12m grant from the government, it counted British tech "unicorns" Monzo and Deliveroo among the firms it has helped over the years, with both now valued at over a billion dollars.

But in January, the government announced that Tech Nation wouldn't be getting the latest iteration of the Digital Growth Grant, and that it was instead being awarded to the Eagle Labs division of Barclays Bank.

Given Tech Nation's apparent success over the years, it was a surprising decision, and one that could have significant consequences for Britain's tech scene.

The Tech Nation connection

To explain exactly what Tech Nation did, you must first understand the unique way that tech startups tend to grow. Instead of a business selling products and using the profits to invest in the business, most tech entrepreneurs seek seed funding to get the business off the ground, and then raise increasingly larger amounts of cash in further rounds of investment, known in the industry as “Series A”, then “Series B” and so on. The idea, which emerged out of Silicon Valley in the 1970s, is to grow fast.