United Kingdom tech firms attract record £5.5bn in foreign investment

The Rt Hon Nicky Morgan

The Rt Hon Nicky Morgan

Overall, the United Kingdom tech sector has attracted more USA and Asian investment in the first half month of 2019 ($3.5bn) than it did during the whole of past year ($2.9bn).

Over half of 2019's investments came from U.S. and Asian investors thanks to the likes of Amazon and Japan's SoftBank, which backed the two largest investments in United Kingdom tech startups, according to Tech Nation.

Industry players say lower valuations in the United Kingdom due to the weaker pound are attracting investors to the sector.

Meanwhile, the U.S. trade war with China is also making the United Kingdom an attractive proposition.

Collectively, these two regions spent $3.7bn (£3.02bn; €3.31bn) in the first seven months of the year - overtaking the $2.9bn invested across the whole of 2018.

Morgan predicted Britain's digital sector was on course to attract over £9.09bn-worth of investments in 2019. The study for the Department of Digital, Culture, Media and Sport body revealed that the United Kingdom has overtaken the U.S. for the amount of investment per capita.

Companies in the UK's fintech and financial sector are amongst those that attracted the most interest from Asia's investors.

Softbank and the Singapore-based Clermont Group also invested $400m in United Kingdom firm OakNorth Bank, a digital-only bank providing loans for small and medium-sized companies.

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The report says that the United Kingdom has overtaken the States, in terms of amount of investment per capita, "a clear sign of confidence investors have in United Kingdom tech".

Online food delivery businesses like Deliveroo and digital payment platforms are among the areas that caught the attention of American investors. Culture secretary Nicky Morgan says, the figures "endorse our reputation as one of the best places in the world to start and grow a digital business".

Experts say the weaker pound is drawing investors to the United Kingdom tech sector, which leads Europe in terms of funding.

The UK government also this week claimed it will end the free movement of labor on day one of its departure, if the European Union doesn't accept changes to the agreed deal, and from there implement a skills-based immigration regime.

"We need a transition plan for companies who need to know what to do about staffing after 31 October".

Mr Shaw has said one of the ways the United Kingdom could mitigate these risks is by making the immigration process for overseas workers easier and more welcoming in the future.

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