The channel between China and the U.K. is shrinking as more Chinese investment pours into this key European market for technology startups. It’s a sign of the times, as China capital increasingly goes outward, and to leading hubs such as London.

 

Fintech startups are viewed as one key sector that can leverage both sides of the bridge, a point that was made by business leaders at a Hong Kong-London  tech forum held at Cyberport. These two cities are each vying to be world-leading hubs for fintech upstarts, one of the hottest areas of technology innovation today.

 

Other developments bring the U.K. and China’s tech markets closer. Consider the new $713 million fund from Chinese private equity-backed Cocoon Networks for investment in European startups. Or Cocoon’s  plans to build out an ecosystem with University College London for tech entrepreneurs to incubate, accelerate, raise capital and get help with intellectual property management.

 

 

Or consider the $34 million recent investment by online gaming company Beijing Kunlun Tech Co. in London-based LendInvest, the world’s largest P2P marketplace for mortgages. Or how about London-based indie film streaming firm MUBI that took in $50 million in funds from Hong Kong-listed Huanxi Media Group.

 

Naturally, Silicon Dragon’s upcoming event in London, Feb. 25, brings in the pros to talk about the growing links. Among the featured speakers are John Zai, Founder and CEO of Cocoon Networks, and Christian Faes, co-founder & CEO of LendInvest.

 

If there is any doubt that London is emerging as the top tech hub of Europe (Berlin is a contender too), consider these points made by Gordon Innes, CEO of the promotion outfit London & Partners, during his delegation’s visit last week in Hong Kong. Some 40 unicorn companies have popped up in Europe and 18 are in the U.K., with 13 of them calling London home. Moreover, London accounts for 65% of the record $3.6 billion venture capital investment in the U.K. during 2015. Notably, fintech startups took in about half that capital.

 

London has become the most popular European city for Chinese foreign direct investment as well. It’s a base for Alibaba , Huawei, Cheetah Mobile and gaming company Rekoo. London has seen a surge of Chinese companies setting up operations in the city: 28 over the last nine months, and maybe as many as 40 by the end of this March.

 

You can bet that the London tech networking scene is vibrant too. Several initiatives such as Tech London Advocates, the development of Here East tech district at the site of the former Olympic Games, and co-working spaces such as Central Working are all contributing to the new energy in the city’s startup zon.

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