Founders fear the UK government’s failure to continue fostering new tech ventures. London might lose its position as tech hub.
According to the Financial Times, leaders of UK tech start-ups are worried that “warm words” over the importance of tech from British chancellor Jeremy Hunt are not backed by policies and financial incentives.
The UK tech sector is bracing itself for the imminent closure of Tech Nation, the country’s start-up accelerator. Once regarded as key to nurturing British start-ups, the industry body is set to close its doors on March 31 because the government has withdrawn its funding. Tech Nation’s 5000+ alumni include the biggest names in UK tech: Monzo Bank, Revolut, Depop, Bloom & Wild, Zilch, Just Eat Takeaway.com, Darktrace, Marshmallow, Ocado Retail Ltd, Skyscanner, Peak AI and Deliveroo.
Instead, the UK government’s Department for Digital, Culture, Media & Sport (DCMS) is handing the £12 million in tech start-up funding to Barclay’s Bank. Given the reliance that banks such as Barclay’s have on fintech, many founders see a conflict of interest in having a global bank become the “start-up champion” for UK tech. For example, Tanya Suarez, founder & CEO of IoT Tribe, commented: “Surely this provides an unfair advantage and could be used to influence the founders choice of banker at several stages of growth”.
London losing its edge?
The FT article also says that many founders are “uneasy” over government plans to scale back the R&D tax credit support that has been widely used by British start-ups to cover funding gaps that occur when companies grow to a certain size.
London is a powerhouse in tech start-ups and hosts almost a tenth of Europe’s fastest-growing companies, according to the FT1000. But the UK is ranked below Italy and Germany in the total number of fast-growing companies.
Brexit also remains an issue, FT says. Entrepreneurs are “raising worries” over the difficulties they have attracting talented staff from the EU. This challenge had been alleviated by a tech visa scheme overseen by Tech Nation, but it is unclear who will carry on this programme after March 31.