US and Asia lead surge in UK technology investment

The UK tech sector is on course to attract a record amount of foreign investment this year, according to research published by the Department of Digital, Culture, Media and Sport's digital economy council on Wednesday.

Futuristic London cityscape
Based on research by Tech Nation and Dealroom, the report said that investment in the first seven months of this year - led by US and Asian investors - had amounted to a "staggering" $6.7 billion, more than the sector attracted during the whole of 2018.

US and Asia lead the way in terms of tech investment in the UK

Some of $3.7 billion of the investment came from the US and Asia and the 2019 total so far means that, on a per capita basis, investment is higher in the UK tech sector than it is in America's.Secretary of State for Digital, Culture, Media and Sport, Nicky Morgan, said, "These fantastic figures show the confidence overseas investors have in UK tech with investment flows from the US and Asia at an all-time high."We have a long-standing reputation for innovation and the statistics endorse our reputation as one of the best places in the world to start and grow a digital business."The report said that the top 30 foreign-funded companies had created more than 5,000 UK jobs and that the surge of investment was in part due to the rising number of high-value deals."During the second quarter of 2019, more than $1.9 billion came via investment deals of $100 million or more," said Tech Nation.

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Homegrown funding for the UK tech industry

"Although the majority of recent money has come from foreign investors, since 2018 37% of investments in UK tech have come from domestic sources. Only France and Netherlands exceed the amount of homegrown funding."Eileen Burbidge, who chairs of Tech Nation, said, "Investment in the UK tech sector has been steadily rising for years and as these latest figures demonstrate, the momentum is increasing."It is incredibly gratifying to see that in addition to domestic and European investors, British tech innovators are also attracting US and Asian investor attention and allocation."The fact that this is growing is a testament to the strength and depth or our entrepreneurial talent, coupled with the dynamic and deeply engaged ecosystem that has been established here in the UK.”

How will Brexit impact the UK tech sector?

However, there remain concerns over the effect leaving the European Union will have on the sector's ability to continue to attract the talent it needs from the continent. There are also fears that a no-deal Brexit could lead to EU27 workers already here, returning home."It's our biggest concern right now," Russ Shaw, founder of the campaign group Tech London Advocates, told the BBC. "One in five tech workers in London is from the EU. We're growing these businesses, and the money is flowing in, but we don't have enough talent in the country."We need a transition plan for companies who need to know what to do about staffing after October 31. Otherwise it undermines our credibility."Mr Shaw has said one of the ways the UK could mitigate the risks was by making the future immigration policy easier and more welcoming for overseas workers.Read more about TechNation and Dealroom's new database, Data Commons for UK Tech. It provides open access to the UK'sentire tech ecosystem online and was built by and for founders, investors, executives and tech enthusiasts.

For more news, visit our Brexit and United Kingdom sections.

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