Chinese investors are set to pour 500 million into London start-ups, also working with UCL to open a 70,000 sq/ft incubator space in the heart of Shoreditch for entrepreneurs to work on their products.
Cocoon Networks, a Chinese VC group, wants to invest in start-ups whose products it thinks would be suitable for China, and it has partnered with University College London to attract talent.
Start-ups picked by Cocoon will gain access to a new incubator space in Tech City from summer 2016, where they can test their products, but in which Cocoon will also work with top London universities to attract entrepreneurs as well as offer accelerator programmes and co-working spaces.
Products will be taken from the concept stage all the way to testing - in the company's own digital testing labs - before launching for the public.
Cocoon Networks is in the process of signing up companies to be included in the space, a spokesperson told IT Pro, looking to partner with organisations that already have co-working space in the city.
John Zai, founder and CEO of Cocoon Networks, said: "The fund will provide capital to help the development of some excellent technology and innovative projects in London and the UK. The fund and incubator programme will bring awareness for more Chinese investors to get into London's booming technology sector. It will also help many companies grow and expand into China."
The 500 million fund aims to offer financial support to the most promising tech start-ups across sectors such as fintech, biotech, medical devices and the UK's creative tech industries, with backing from China Equity Group and cloud computing and biotech specialists 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 start-ups," said Gordon Innes, CEO of London & Partners, a Mayor of London-backed PR group for the capital.
"London is experiencing unprecedented growth in its technology sector, and there is a wealth of opportunity for entrepreneurs and investors to get a foothold in the UK and the rest of Europe."
According to London & Partners, businesses in London are on course to secure a record amount of investment from Chinese companies this financial year, with 28 Chinese companies worth 23 million having pledged to set up in the capital.
By the end of March 2016, this is predicted to have risen to 40 companies.
Li Cha, founder and managing partner at iStart Ventures, said: "The Chinese economy is vastly in need of innovation which comes from either competition in the domestic market or from international inspiration. In this respect, London is a good source of international trends and aspiration in technology and cultural creativity.
"Chinese investors have started exploring opportunities outside of China, in order to grab hold of global cutting edge technology as well as to diversify their portfolios. In light of this, London serves as the best hub in Europe."
