By John Reynolds on Tuesday 27 September 2022
A report in The Sunday Times said that the future of Tech Nation was in doubt after losing a key government contract. Some fintechs declined to comment about the future of Tech Nation while others, who had been on its programme, spoke highly of it.
Fintechs have highlighted the important role played by the government-backed tech growth platform Tech Nation in helping them flourish, following a report that its future was in doubt after losing its key government contract.
The Sunday Times reported that Tech Nation, which counts Monzo and Revolut as alumni, had lost the £12m government contact- spread over two years- to Barclays.
The report says that Tech Nation, which was formed in 2018 by the merger of Tech City UK and Tech North, will continue to administer the Home Office’s digital visa scheme.
The loss of the key government contract- which has not been confirmed by the government- comes amid concern about Tech Nation breaching state financial help rules as it had failed to become self-sufficient.
Its lack of independent financial wherewithal led officials to put the contract out to tender earlier this year.
Tech Nation has provided support for a range of fintech luminaries over the years including Revolut, Monzo, PrimaryBid, Funding Circle, and Credit Kudos.
Earlier this month, it added 13 new companies to its Future Fifty programme, including fintechs Zilch, Yapily and YuLife.
Yapily declined to comment on the report on Tech Nation’s uncertain future.
Likewise, other fintechs contacted by AltFi, who had received support from Tech Nation, also declined to comment about the future of the non-profit, indicating the sensitivity of the issue.
But Yapily founder and CEO Stefano Vaccino has previously said: “It’s exciting to be part of a really strong cohort in which we can share and gain insight into how other fintechs have successfully scaled their companies.”
PrimaryBid, a startup aiming to democratise the public equity markets by allowing retail investors to buy shares in IPOs and other fundraising, said the scheme had been beneficial to its growth.
Kieran D'Silva, CFO and co-founder at PrimaryBid told AltFi: “We were part of both the Fintech and Future Fifty programmes run by Tech Nation.
“PrimaryBid benefitted from help on talent visas, the high quality speaker and peer programmes they coordinated, and we were impressed with their coordination work on the Fintech pledge."
Other fintechs also spoke highly of Tech Nation and the help it provided to fintechs.
Tech Nation’s existing government funding runs until March 2023.
The scheme was launched in 2011 by former prime minister David Cameron to help support Britain’s tech startup industry.
While relying predominantly on government funds, it also received funding from private investment.
Gerard Grech, chief executive of Tech Nation, said the body’s work represented a £15 return on every £1 invested by the government.
“Tech Nation plays an important role as the engine room for UK tech scale-ups and we look forward to continuing to build on the successes,” Grech said.
“Outside of any potential DCMS related activity, we will also continue to support the tech ecosystem via our Growth Platform, our Global Talent Visa and a wide array of other activities and look forward to sharing updates soon about further growth of the UK Tech community.”
Grech has previously told UKTN that around 75 per cent of Tech Nation’s funding is derived from government grants, with the rest coming from revenues like sponsorships and its growth programme.
It has also launched paid-for masterclasses and subscription services.
Tech Nation will continue to receive government financial support until March but then will have to ramp up its commercial revenues if it wants to maintain its existing output..
The latest annual report from Tech Nation reveals it undertook stress testing showing it would remain a going concern if it lost the key government contract.
Meanwhile, the awarding of Barclays a key government contract is likely to be seen as controversial.
A source told the Sunday Times that it was “laughable” that a FTSE 100 giant had been given a government grant.
A DCMS spokesperson said: “No final decisions have been made. The successful grant recipient will be announced in due course.”
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