Nothing less than a war has broken out between an influential swathe of the U.K. tech startup community and the British government, after the latter has allegedly sought to hand the curation and promotion of British startups -- both inside the U.K. and abroad -- over to a single U.K. bank.
As we covered previously, Tech Nation -- a "QUANGO"’ which has for many years been charged with the task of being the U.K.'s government-backed "startup champion" -- had been bidding for a continuing £12 million contract, starting from March 2023. But this was put out to tender by the Department for Culture, Media and Sport and, sources allege, the contract was poised to be granted to banking giant Barclays Bank for the sole operation of the role. The move was branded “insane” and “mad” by some key U.K. industry players TechCrunch spoke to.
Now, an open letter, signed by over 60 startup founders and other key players, has been published by the Coalition for a Digital Economy (Coadec), an independent nonprofit that campaigns for policies to support digital startups in the U.K.
The letter calls on the government to commit to retaining Tech Nation in its role, a role which it has filled in various guises since September 2011.
Should the move go through, claims the 60+ group, Barclays would be in charge of a number of critical services for startups, such as visa sponsorship and applications for staff hired from abroad, as well as the external promotion of the U.K.’s startup ecosystem globally. Coadec argues this could put it into a conflict of interest on a number of fronts.
Signatories to the letter are highly influential in the U.K. tech scene. They include Brent Hoberman (co-founder and chairman of Founders Forum), Taavet Hinrikus (co-founder and chairman of Wise), Tessa Clarke (co-founder and CEO of OLIO), Aron Gelbard (co-founder and CEO of Bloom & Wild), Alex Depledge (founder and CEO of Resi) and Ali Parsa (co-founder and CEO of Babylon Health).
Because of the alleged moves to hand the contract over to Barclays, the group contends that this might put at risk current services to startups overall (including the visa system and promotional work); would hand a key aspect of government support over to a bank which has had the long history of Tech Nation in the ecosystem; and argues that any new arrangements should “add support to the startup ecosystem, not subtract from it”.
In a statement, Dom Hallas, Coadec executive director, said the government’s move would mean it would be "pulling away” from the tech startup ecosystem rather than retaining a close interest. This would also be in marked contrast to the ruling Conservative Party's oft-repeated phrase that it is "pro-business".
“Amid economic turbulence, startup founders need help more than ever. This means Government backing the ecosystem more - not pulling away. We want to ensure that if changes to support do occur, the things startups value most, including the special visa system for tech, are protected,” said Hallas in a statement.
TechCrunch has reached out to the DCMS for comment and will update this story with their response.
• Declaration of interest: Coadec was founded in 2010 by Jeff Lynn, executive chairman and co-founder of online investment platform Seedrs, and myself (Mike Butcher, editor-at-large of TechCrunch, though I no longer have any formal or informal involvement).