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Having placed the £12 million contract out to bid, Tech Nation is now in second place in the contest to keep the title of "startup champion" supported by the U.K. government. Banking behemoth Barclays is now first in line for a decision that is due in December. The government's current support for Tech Nation expires in March 2023.
However, several significant U.K. business figures have called the idea of a successful, international bank acquiring the contract "crazy" and "mad."
The government put the contract up to bid earlier this year after authorities became concerned that Tech Nation was "breaching state assistance laws since it had failed to become self-sufficient," according to a story in The Sunday Times over the weekend.
We know that the final decision has not yet been made, despite the Times' claim that Tech Nation has lost the contract. Furthermore, it is acknowledged that Tech Nation plans to continue operating "as is" even without government subsidies, funded by sponsorships, subscriptions, and partnerships.
Through its network of Eagle Labs incubators, some of which have physical facilities but the majority do not, Barclays applied for the contract.
This, albeit uneven, countrywide presence is reportedly helping the government win over support for its so-called "levelling-up" policy, which aims to encourage more start-ups outside of London.
Barclays would be able to manage the Home Office's digital visa programme if it were to be successful, albeit it is doubtful that it would have a monopoly.
Once more, false information has been spread about Tech Nation losing this capacity. The Home Office authorised Tech Nation to serve in this capacity, and the final government decision will have no impact on Tech Nation's ability to support the Global Talent Visa. The £12 million financing and the administration of the Visa system are, in reality, different concerns.
The U.K. tech startup ecosystem has long been a part of Tech Nation. Before merging with Tech North in 2018, Tech City UK, its predecessor, was founded in 2011 by former prime minister David Cameron and focused primarily on the London ecosystem (based in Manchester). Since then, it has continued to operate a variety of programmes that link digital startups and scale-ups with one another and with investors in the UK and overseas.
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Lord (Jo) Johnson, Boris Johnson's brother, and Stephen Kelly, a former Sage executive, serve as the nonprofit's chairs.
The work of Tech Nation, according to CEO Gerard Grech, "represents a £15 return on every £1 invested by the government."
He said in a statement: "We've helped over 4,000 IT startups from all around the United Kingdom. More than 30 per cent of the 122 tech unicorns in the UK (such as Monzo and DarkTrace) are graduates of the Tech Nation programme (49 in total to date). A TN non-dilutive accelerated growth programme graduates about 44% of the UK's decacorns (the failure rate thus far is less than 5%).
"The Tech Zero commitment, which was co-founded with businesses like Mozo and Olio and pledges tech companies to Net Zero, has been endorsed by hundreds of tech enterprises. In addition to the most current Diversity & Inclusion toolkit we just released for tech entrepreneurs to assist them in developing a more diverse workforce, our Libra development programme throws a focus on founders and leaders from under-represented segments of society.
"As of right now, Tech Nation's effort provides a £15 return on the £1 the UK Government funded. In the most important sector of the economy for growth, this is one of the finest returns on public investment, he continued.
In its most recent annual report, Tech Nation stated that even without government support, it could continue to operate.
The decision to entrust a big international bank with sole responsibility for fostering the U.K.'s digital startup environment has generally been met with dismay by the industry.
Because the bank would have to fund initiatives for fintech firms, putting it in a conflict of interest, one source told City A.M. that the decision was "like having an arsonist educate youngsters about fire prevention."