But a survey by accountants RSM finds UK businesses want more investment in infrastructure.
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Investment in UK tech start-ups continues to soar, with huge sums coming from Asian and Middle Eastern investors.
The amounts raised in the first half of 2021 have also almost surpassed the total amount raised during the whole of 2020, according to new data.
By the end of June, Asian and Middle Eastern investors had poured more than £1.7bn into UK tech companies, equating to 13.2% of total investments made in the country.
New figures compiled by Dealroom.co for the Department of Digital, Culture, Media and Sport’s Digital Economy Council, show that 2021 is on track to be an even better year than 2020 for investment flows from Asia to the UK.
It means the first six months of the year saw 5.7 billion dollars (£4 billion) raised by UK firms across 317 deals in total, according to Innovate Finance, the trade body for the UK fintech scene.
This eclipsed the total secured in the 12 months of 2020 with investment in the sector above pre-pandemic levels, Innovate Finance said.
However, the data comes as nearly 70% of middle market business leaders believe more investment needs to be made in the UK’s infrastructure, according to a separate survey.
Accounting firm RSM found that the lack of investment in infrastructure is leading to 80% of UK business leaders investing directly into their own infrastructure, although nearly a third said accessing finance is proving difficult.
The Government has been focusing its attentions on turning the UK into the tech centre of Europe and was given a boost earlier this month when money transfer business Wise, formerly TransferWise, chose London for a stock market listing.
It ended up being the biggest listing of the year and the largest fintech listing in the London Stock Exchange’s history.
SaltPay and Checkout.com attracted the two largest private investment deals made this year, and are among the largest fundraises in the UK fintech sector so far, with 500 million dollars (£360 million) and 450 million dollars (£324 million) respectively.
Asian investors took part in 106 deals last year and have already been involved in 95 in the first half of 2021, according to figures from Dealroom.co.
Within Asia, the country investing most heavily in UK tech is Japan, followed by Singapore, Hong Kong, Malaysia and China.
However, Japan’s dominance of Asian investment flows to the UK has become weaker in the last five years, as investors in other countries have backed investment opportunities here.
The five biggest Asian investors in the UK in 2020 were Japan’s SoftBank, Singapore’s GIC, Honk Kong’s DST Global, Singapore’s Temasek and China’s Tencent.
Elsewhere in Asia, there was also a strong showing by sovereign wealth funds in Abu Dhabi and Qatar, which were involved in UK fundraising for Starling Bank and Tandem.
Matt Warman, Minister for Digital Infrastructure, said: “The UK tech sector is home to the most innovative, most exciting and most globally scalable startups in the world, so it’s no surprise Asian investors are recognising just what a wealth of talent we have here.”
Minister for Investment at the Department for International Trade, Gerry Grimstone, said: “Investors around the world are taking advantage of the UK’s high-skill, diverse economy, and it’s great to see investors in Asia have poured more than £1.7bn (two billion euros) into UK tech companies.
“We are ramping up efforts to attract investment into all corners of the UK, with our Office for Investment, Investment Council and regional Trade and Investment Hubs making it easier for businesses to find the right projects and assets that meet our strategic priorities.”
But Joe Brusuelas, chief economist at RSM, which conducted the survey among middle-market bosses, said focus must also be on modernising infrastructure too.
He said: “UK businesses have identified infrastructure as the critical nexus of UK economic revitalisation in the post-Brexit and pandemic era.
“This survey illustrates just how important infrastructure modernisation is to both the rebalancing of the national economy from an over-reliance on the City of London and the entire levelling-up agenda to create an equitable and sustainable domestic economy.”