Chinese language funding agency to launch £500 million London-based fund to spend money on European tech startups

Chinese language know-how and funding group Cocoon Networks is launching a £500 million ($720 million) London-based enterprise capital fund aimed toward investing in UK and European tech startups.

Cocoon Networks, which has the backing of China Fairness Group, one of many first buyers in to Baidu, China’s reply to Google, and Hanxin Capital, which specialises in cloud computing and bio tech investments, will look to spend money on tech corporations whose services present promise and potential for progress within the Chinese language market.

The fund will look to spend money on tech corporations throughout a variety of sectors together with fintech, biotech, medical units and the UK’s artistic tech industries, like fashion-tech. Corporations trying to increase into China may also be provided help in navigating Chinese language laws and sensible assist about doing enterprise there.

As a part of a wider funding, Cocoon Networks, in partnership with College School London, can also be establishing the capital’s largest incubator area, in an effort to present the perfect surroundings for rising tech startups.

John Zai, Founder and CEO, Cocoon Networks stated: “The fund will present capital to assist the event of some wonderful know-how and revolutionary tasks in London and the UK.

“The fund and incubator programme will deliver consciousness for extra Chinese language buyers to get into London’s booming know-how sector. It’ll additionally assist many corporations develop and broaden into China.”

Gordon Innes, CEO London & Companions, The Mayor of London’s promotional firm, stated: “This can be a vital vote of confidence within the international nature of London’s tech sector and can ship vital funding into a few of the capital’s brightest and greatest startups.

“London is experiencing unprecedented progress in its know-how sector, and there’s a wealth of alternative for entrepreneurs and buyers to get a foothold within the UK and the remainder of Europe.”  

The incubator, a 70,000 sq ft constructing is located within the coronary heart of London’s Tech Metropolis near Moorgate, Liverpool St, and Previous Road stations. Cocoon says it won’t solely be an incubating area for know-how corporations however it’s going to additionally work with a few of London’s world class universities to draw expertise, supply accelerator programmes and co-working areas.

The incubator will work with startups to take merchandise from the idea part and check them in an actual surroundings – Cocoon’s personal digital testing labs – earlier than going reside on the general public market. Cocoon says this testing and help infrastructure allows startups to compete on a degree enjoying area with bigger corporations.

The announcement by Cocoon Networks got here as London & Companions stated that it was on target to safe report funding from Chinese language corporations in London this monetary yr.

During the last 9 months 28 Chinese language corporations, value £23million ($33m) to the town’s financial system, have already pledged to arrange in London, with that determine anticipated to rise to nearer 40 by the top of March 2016. The earlier greatest yr for Chinese language funding in London was in 2011/12 when 30 Chinese language corporations got here to the town.

Boosted by the go to of President Xi Jinping to the UK final yr and the Chinese language authorities’s drive to encourage innovation and entrepreneurship, London is already the preferred metropolis in Europe for Chinese language overseas direct funding. Chinese language corporations and enterprise capital funds at the moment are being inspired to take a look at London as the subsequent massive tech funding, as the town has grown to turn into Europe’s largest tech hub.

London has welcomed many Chinese language know-how corporations together with Huawei Applied sciences, Alibaba, gaming big Rekoo, Cheetah Cellular and Deyatech, an organization providing enterprise content material administration for companies.

One of many largest Chinese language investments in to a London know-how firm final yr was £23 million ($34million) by Beijing Kunlun Tech Co in to Lendinvest, the world’s largest peer to see market for mortgages, having financed over £300m of mortgages in its first two years.

Li Cha, Founder and Managing Companion, iStart Ventures LLC, added: “The Chinese language financial system is vastly in want of innovation which comes from both competitors within the home market or from worldwide inspiration. On this respect, London is an effective supply of worldwide developments and aspiration in know-how and cultural creativity. Chinese language buyers have began exploring alternatives outdoors of China, to be able to seize maintain of worldwide leading edge know-how in addition to to diversify their portfolios. In mild of this, London serves as one of the best hub in Europe.”

The UK tech sector has skilled speedy progress since British Prime Minister David Cameron and Mayor of London Boris Johnson launched the Tech Metropolis initiative in 2010. Figures launched final week present that in 2015 enterprise capital funding in to Britain’s know-how sector reached a document excessive with London-based corporations securing round 62% of the £2.5 billion ($three.6bn) raised by UK companies in 2015.

Gavin Poole, CEO, Right here East added: “At Right here East we see first-hand that London is brimming with an enormous vary of thrilling tech start-ups –from the delivery and speedy progress of makers redefining product improvement in sectors together with fintech and biotech, to data-led shopper software program companies. Funding from China and different nations is essential to enhancing the entry to funding and infrastructure that may assist these start-ups to scale shortly, benefitting all companions. In an more and more globalised world, sharing innovation and collaborating throughout continents is significant to maximising the financial and artistic output of start-up communities worldwide.”