Inward investment back on the agenda at London Tech Week

London Tech week is always a very busy period for tech PR agencies with a blitz of announcements. Yesterday, we heard all about Keir Starmer’s plans for an extra £1bn of funding to scale-up the UK’s compute power (see Government commits £1bn to AI infrastructure development). The focus now shifts to Foreign Direct Investment (FDI) and a list of companies setting up shop or expanding on these shores.

Governments of all flavours love FDI and regularly reference it as a vote of confidence in UK PLC and of course their own activities. Science and Tech Secretary Peter Kyle announced yesterday a long list of tech investment with major commitments totalling over £1.7bn (my maths) across AI, fintech, and consultancy sectors. US AI fintech Liquidity leads with £1.5bn in planned investments over five years, whilst Dutch AI infrastructure firm Nebius commits £200m for a UK AI Factory in Southeast England.

European expansion is notably strong, with French firms Ekimetrics (£8.5m, 150 London roles) and Danish consultancy Netcompany (£2m across Leeds and Edinburgh) establishing significant presences. Major transformation player and SI Capgemini is creating a new UK headquarters in London following strong performances.

Emerging markets are also targeting the UK, with Colombian fintech Yuno and Romanian consultancy Rebeldot establishing European operations in London and Warwick respectively. InnovX AI's £14.7m London technology hub further reinforces the capital's startup ecosystem.

This investment wave demonstrates London's continued appeal as Europe's premier technology destination, particularly for AI and fintech companies seeking to scale internationally, despite broader economic uncertainties affecting the sector.

To reinforce the point, a separate press release from Ernst & Young (long term ‘counters’ of FDI projects) announced that London had maintained its position as Europe's top digital technology FDI destination with 96 projects in 2024, though this represented a 28% decline from 2023. The UK overall attracted 161 tech FDI projects, down 37% year-on-year, reflecting broader European trends with continental tech FDI falling 17%.

The decline continues a concerning multi-year trajectory, with UK tech FDI down 63% since 2019 (from 432 projects) and European tech investment falling 46% over the same period. US investment, historically the largest contributor, has declined dramatically—US tech FDI to the UK dropped 80% since 2019. Notably, India overtook the US as the UK's leading tech FDI source for the first time, contributing 40 projects versus 33 from America, signalling a significant shift in investment patterns.

Posted by: Marc Hardwick at 08:50

Tags: FDI