The Department for International Trade reported that Asian investors alone have taken part in 60 deals in the first six months of 2022 investing £2.3 billion.
In June 2022, London Tech Week witnessed the arrival of the largest ever delegation from the fast-growing Asia Pacific region to the capital. Over 350 business and industry figures joined the event to explore the benefits of expanding into the UK, drawn to its business-friendly environment and expertise, as well as to seek out investment and partnership opportunities across the UK.
“Investors in Asia have poured more than £1.7bn into UK tech companies”
Investment in UK tech start-ups continues to climb, with enormous sums coming from Asian and Middle Eastern investors. Data compiled for the Department of Digital, Culture, Media and Sport’s Digital Economy Council, revealed the amounts raised in the first half of 2021 almost surpassed that of the whole of 2020.
Gerry Grimstone, UK Minister for Investment at the Department for International Trade, 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 into UK tech companies.”
Who are the leading Asian investors?
Key investments from Japanese, Chinese, and Korean companies continue to make significant contributions to the UK economy. The five biggest Asian investors in the UK in 2020 were Japan’s SoftBank, Singapore’s GIC, Hong Kong’s DST Global, Singapore’s Temasek and China’s Tencent.
Japan - first to strike an independent trade deal with the UK
Japan was the first country to agree to a major trade deal with the United Kingdom as an independent trading nation. The “Japan-United Kingdom Comprehensive Economic Partnership Agreement” stipulates a new framework for trade and investment.
Hajime Hayashi, Ambassador of Japan to the United Kingdom commented “…we have witnessed many instances of new investment after Brexit. I am confident that Japanese companies will continue and even expand their active engagement with the United Kingdom economy.”
Chinese companies have supported almost 61,000 jobs in the UK
Turning to China, in 2020, the inward stock of foreign direct investment (FDI) in the UK from China was £3.4billion, accounting for 0.2% of the total UK inward FDI stock. According to the professional services network, Grant Thornton, Chinese companies created or supported almost 61,000 jobs in the UK.
The UK has become a top destination for South Korean green investment
The UK and South Korea are looking to build on a £13 billion trading relationship and now the UK has become a top destination for South Korean green investment. The UK Dept of Trade and Industry (DTI) recently signed an agreement with the Korean Investment Corporation (KIC) aimed at increasing Korean investment in green and sustainable projects in the UK.
South Korean firm SeAH is investing £260 million to boost the UK’s offshore wind capacity in the North East, which will create hundreds of new jobs and help the UK build back greener.
Investment opportunities are emerging from South Korea
In South Korea, the commercial landscape is shifting dramatically, with the emergence of a new breed of fast-growing tech groups – many of them securing unicorn status in sectors such as e-commerce, gaming, and finance.
The number of unicorns in Korea grew from 13 to 18 in 2021, even without counting well-known companies like Coupang and Krafton which went public. And these new unicorns have become well-known brands in Korea. They include peer-to-peer marketplace Danggeun Market, valued at $2.4 billion, grocery e-commerce platform Market Kurly ($3.3 billion), house hunting app Zigbang ($1 billion), and interior design platform Bucketplace ($1.5 billion).
Major Korean conglomerates are already wise to this development, investing in start-ups at home and abroad and often establishing their own VC arms for this purpose. Hyundai Motor Group, for example, made the news last June when it acquired US robotics innovator Boston Dynamics; while AI healthcare tech company Lunit has received investment from Kakao Ventures and LG Technology Ventures.
Opportunities for UK and international tech investors
Importantly, the emergence of dozens of cash-rich new tech companies which are seeking to scale their businesses - often globally - is opening huge opportunities for UK and international firms.
Companies with cutting-edge solutions in areas as diverse as cybersecurity, e-commerce, logistics, and adtech may well find lucrative customers in this new class of Korean tech group.
How 3CS can help
For legal help and advice on investing in the UK or any other corporate or commercial legal matter, please contact a member of our team.