The decision is a ‘direct result’ of it losing out on over £12m of government-backed funding to Barclay’s Eagle Labs, the bank’s startup incubator, following a public tender process with the Department for Digital, Culture Media and Sport. 

The move will come as a blow for the UK tech startup community, as the company concludes over 10 years of existence. News of it losing out on the grant in September 2022 prompted an open letter signed by more than 140 tech stakeholders calling for government-backed support to be “grounded in the startup ecosystem”. 

Despite initial plans for the organisation to continue operating by plugging this shortfall with expansion of its commercial revenue, the company today said: “We have exhaustively explored whether Tech Nation could continue without core government grant funding, but have concluded after extensive consultation that this is not an option.”

Founded during the coalition government, Tech Nation was the UK’s bid to create a tech industry that rivalled the likes of Silicon Valley. It operated visa processing for the Home Office, support programmes for startups, which includes alumni like Monzo, Depop, Skyscanner and Just Eat, and claims that more than a third of all tech unicorns and decacorns created in the UK graduated from a Tech Nation programme, collectively raising over £28bn. 

“I am grateful to the government’s support over nine years, and feel proud of all we achieved. It has been an incredible journey. Together we have made the UK tech economy a global powerhouse for tech talent and now third in the world for tech investment, after the US and China,” Tech Nation CEO Gerard Grech said.

But the government is reported to have tendered the contract last year after raising concerns that Tech Nation was in breach of state aid rules after failing to become “self-sufficient”. Tech Nation had claimed roughly 62% of its funding in 2021/22 had come from this grant, with additional, but smaller grants being awarded to it by the Ministry of Justice and the Department of International Trade.

The government defended the recent move, stating the Barclays bid “represented the best value for taxpayers’ money”. The two-year contract awarded to Barclays Bank and their Eagle Labs programme will begin in April of this year.