TechHub, the self-styled global community for tech entrepreneurs and startups, has gone into administration due to significant reductions in revenue caused by the Covid-19 coronavirus pandemic.
The organisation, which provided workspace near London’s Silicon Roundabout and offered tailored support to help developing startups and entrepreneurs, announced in a blogpost by founder and CEO Elizabeth Varley that it had been forced into administration on 1 August.
“It is with huge hurt and sadness that I am announcing today that TechHub has been forced to go into administration,” she wrote.
“Unfortunately, with a significant reduction in revenue due to the impact of Covid on our member companies, and without an agreement from our major landlord to our proposals for a way forward, we are unable to continue.”
Since its founding in 2010, TechHub has been used by more than 5,000 member companies, including DeepMind, Monzo and Babylon Health, which Varley told Computer Weekly are estimated to have collectively raised more than a billion dollars in funding over the course of the decade.
Varley also said the closure was “100% because of the pandemic”, adding that the company was operating its London workspace at “almost full capacity in February this year”, but has lost three-quarters of its income since the start of lockdown on 23 March.
“Most people are obviously working from home and they have also been hit – some of them have lost customers, some of them have lost funding, all sorts of things – but that means that they needed to reduce their costs and so moved to full-time working from home,” she said.
In an effort to keep afloat, TechHub joined with its stakeholders – funders, advisers, employees, and so on – to devise a plan for navigating the pitfalls of the pandemic, but this was dismissed by the landlord who “would not discuss or negotiate it”.
While she could not publicly discuss details of those proposed plans, Varley said: “All of the stakeholders were in agreement that it was workable… and that it was an appropriate response to the situation”, adding “we don’t know why [the landlord] wasn’t prepared to negotiate.”
TechHub’s administrator Paul Stanley, regional managing partner at Begbies Traynor, said: “TechHub’s rescue plan was very viable – TechHub’s customer levels were almost at full capacity just before lockdown was enacted by the government, and the company is only in this position because of the Covid situation.
“The funders, advisers, directors and employees were happy with the rescue plan, and I’m very surprised that the landlord as major creditor wasn’t even prepared to engage with the company about it.”
Public documents show that Intercontinental Exchange, the parent company of the New York Stock Exchange, is the landlord subleasing the space to TechHub. Intercontinental Exchange declined to comment when contacted by Computer Weekly.
Varley added that while rent in the Shoreditch area where TechHub operates has “skyrocketed” in the past decade, the organisation’s partnerships with bigger corporate entities allowed it to maintain flexibility in pricing and be “relatively inexpensive” for startups and early-stage companies who would otherwise not be able to afford the space.
“Had we not been here, many of our companies would have been priced out of this area a long time ago,” she said.
“The outpouring of support has been phenomenal and incredibly touching. People have Tweeted or commented saying, ‘What we do would never have happened if TechHub hadn’t been there’, and it’s just incredibly gratifying to know that all of the work that we’ve put in – I started work 11 years ago, July was our 10-year anniversary – has made such a difference.”