In October last year China President Xi Jinping visited London for 3 days – in that time he and Madame Peng met the Queen and the Duke of Edinburgh, gave a joint press conference with David Cameron, discussed tackling world poverty (during a meeting with opposition leader Jeremy Corbyn), visited Imperial College London (the UK’s number one research collaborator with China) and attended drinks and a formal dinner at Chequers.
During the visit, which was heavily criticised at the time by the media for its perceived kow-tow-ing to the premier of a country with a questionable human rights record as well as the controversial decision to partner with China General Nuclear Corporation to build the Hinckley Point C Power Plant, the first new nuclear power station to be built in the UK in a generation, President Jinping also presided over agreements for numerous partnerships that represent a significant boon to the nation’s tech and start-up entrepreneurs.
£325m of creative and technology partnerships were announced from low-carbon taxis to investment in TV training programmes; UKTI signed agreements with 5 top Chinese e-commerce marketplaces estimated to be worth £1 billion to UK companies over the next 3 years; visitor VISA’s for Chinese tourists were extended from the standard 6 months to 2 years; an agreement between Alibaba and the China Britain Business Council (CBBC) was announced which has already saved £8m of counterfeit goods based on UK brands being sold online; and the North of England will open up a new air route with China to help “unlock the Northern Powerhouse” and capitalise on a multi-million regeneration project centring on Middlewood Locks in Manchester.
That’s what we would call a busy 3 days by anyone’s standards.
And now there is a further boost to the UK’s tech economy coming in the shape of Cocoon Networks, a Chinese technology and investment group, which has announced the launch of a London Based $500m fund targeting European technology start-ups. The fund will look to capitalise on the niche areas of disruption created by London’s thriving tech scene, FinTech, FashTech, medical devices and bio-technology, and the creative industries.
Cocoon Networks are also planning to launch one of the world’s largest tech incubators in London, having secured a 70,000 sq. ft. building near Liverpool Street in the heart of the financial district and a short walk from Shoreditch and the Old Street, or “Silicon” roundabout.
The fund and the incubator space together will also provide mentoring and access to new sales and marketing channels, as well as helping “Chinese investors to get into London’s booming technology sector”, says John Zai, Cocoon Network’s founder and CEO. Cocoon Networks is backed by China Equity Group, amongst others, one of the first investors into Chinese Google Baidu and cloud storage investor Hanxin Capital. “This is a significant vote of confidence in the global nature of London’s tech sector and will deliver significant investment into some of the capital’s brightest and best startups”, says Gordon Innes, CEO of London & Partners, the mayor’s press office.
Over the last nine months 23 Chinese companies have pledged to set up offices in London; it’s estimated they will be worth some £23m to the nation’s economy and makes London China’s premier destination for business development throughout the whole of Europe. Last year Beijing Kunlun Tech Co took a £23m equity share in LendInvest, the London based peer-to-peer marketplace for mortgages, having used the service to bankroll £300m of mortgages.
China has been long thought of as a tricky place to do business thanks to significant cultural differences which includes a strikingly different social media and tech infrastructure. Looking to the future however, the complex barriers to successful business partnerships are slowly being peeled away as both nations make concerted efforts to understand one another better and forge closer working relationships.
For the humble start-up, opportunities to crack the vast Chinese market, which would add a vast addressable marketplace to almost any business focused on overseas expansion, have never been more enticing or more actionable, and not just in London; Yu Xiong, a Director at Cocoon, is also professor of technology and operations management at Newcastle Business School, and expects Cocoon to build ties with Northern Universities in the hope of incubating many of the next great disruptive tech platforms and tools.
On a day when Tech City UK have released a new report into the state of the nation’s tech scene, and following a lively debate at Here East about how London’s next mayor will look to boost its digital economy and services, tech, start-ups, entrepreneurs and investors are more centre-stage than at any time since Tech City launched back in 2010.
Amen to that, we say. Time to brush up that pitch deck.