A new £40-million Fast-Track Start-up Fund set up as part of the UK-India Tech Partnership is one of many initiatives aimed at boosting London's lead in attracting Indian technology companies with global ambitions. The trend is gradually also beginning to make a mark beyond the UK capital.
The UK-India tech partnership has seen many successful collaborations between the UK and Indian tech companies.
Indian technology companies continue to consider London to expand their business and use it as a launchpad into new markets.
The Fintech sector in particular continues to attract significant investment from Indian companies.
In June 2019, Infosys announced the opening of an Experience Design and Innovation Studio in Shoreditch, east London. The Indian software giant's new state-of-the-art studio, which has a capacity of 250 employees, is aimed at providing local start-ups with the opportunity to ideate, collaborate and innovate together by combining design and the latest technology offerings, including artificial intelligence (AI), augmented reality (AR), virtual reality (VR), internet of things (IoT) and 5G. The studio fast became the centrepiece of London's Silicon Roundabout hub in Shoreditch, an ambitious play to compete with the Silicon Valley across the Atlantic.
“We have invested in the heart of Silicon Roundabout in London because of the larger presence of entrepreneurs, innovative start-up ecosystem, proximity to some of the world′s largest and most successful brands and the access to diverse talent,” said Infosys President Ravi Kumar S. “In addition, to enhance the availability of relevant talent, we are partnering with universities across the UK, through academic partnerships, to develop digital talent,” he explains, in reference to the choice of the east London hub.
And the Infosys case study is understandably sited by London and Partners, the Mayor of London's promotional agency, as among the highlights of a year that saw the UK capital match up to New York as one of the most attractive tech investment destination. Laura Citron, CEO of London & Partners, told 'India Global Business': “We continue to see a strong appetite from Indian technology companies looking to London as a destination to expand their business and use it as a launchpad into new markets.
“London has all the right ingredients you need to grow and scale an international technology business. Tech companies based in London can benefit from access to high levels of growth capital, world class talent and the ability to do business across multiple time zones, all in one day. The success of London's tech sector is built on its diversity and we want to welcome businesses and talent from all over the world.” She also highlighted the strong two-way quotient of the exchange, with opportunities for London companies in the fast-growing Indian market. “We've setup offices in Bangalore and Mumbai to improve collaborations and help companies realise the potential to do business across both regions,” said Citron.
Investment in UK fintech hit a record $2.9 billion in the first six months of 2019, up 45 per cent compared to the same period last year, according to industry body Innovate Finance. Deloitte ranks London Number 1 for fintech, with 27 of the “Fintech 50” firms headquartered in London, which is home to 11 per cent of the global fintech industry.
Rishi Khosla's London-headquartered fintech start-up OakNorth, a scale-up business lender which uses an artificial intelligence model to provide loans for small and medium sized companies to be able to grow their businesses, leads the UK capital's financial technology boom. It brought in $440 million into London over the previous year, making it the third-largest fintech investment deal in Europe after Berlin and Stockholm. And, since 2014, Indian fintech start-ups have seen almost £4.5 billion invested across 660 deals with the UK.
City of London Corporation Policy Chair Catherine McGuinness notes: “Fintech is an area of enormous potential for greater collaboration between the UK and India.
“The City Corporation has been at the forefront of promoting this agenda, helping position the UK as a knowledge partner for the Indian market, and assisting Indian companies access the knowhow, expertise and partnership opportunities available in London and across the country. The door is open for Indian firms to explore the UK market and we're keen to support those companies on their journey of international expansion.”
The UK-India Tech Partnership was struck during Indian Prime Minister Narendra Modi's visit to the UK in April 2018 and has since covered a series of milestones, most recently the setting up of a £40-million Fast-Track Start-up Fund, supported by both the UK and Indian governments to invest in Indian start-ups focussed on emerging technology.
The UK's Department for Digital, Culture, Media & Sport (DCMS) has also launched the Go Global programme, to provide start-ups with the skills required to grow their business and to drive the tech collaboration between the two countries. Successful Indian start-ups in the Go Global programme are expected to take up the roles of Go Global champions to share the skills they have learnt, with other companies in India.
“Around 31 per cent of India's investments in the UK are now in tech, while the UK has increased its digital services exports to India to £344 million. Notably, India now places the UK as the second-largest international partner in research and innovation,” notes Julian David, CEO of techUK - the representative body for the UK's tech industry.
And this where Modi's recent freewheeling interview with billionaire American investor Ray Dalio at the Future Investment Initiative in Riyadh comes into play, where he spoke about the importance of connecting the start-ups around the world. “I request investors from all over the world, in particular venture funds, to come and make the most of our start-up ecosystem,” he said.
The partnership is gradually making its mark beyond the traditional hub of London, with Manchester among the cities at the forefront of making a play for Indian tech investments.
As part of the wider Manchester India Partnership, the northern region has set its sights on driving a £400-million economic boost for India and the North of England in the next five years. Salford in Greater Manchester has an ambitious vision to position itself as a true “Digital City” and during a recent delegation to India, called on India's tech and innovation companies to look north as part of their UK expansion strategy.
According to UK government estimates, India is home to a thriving digital sector worth approximately $200 billion and is a growing hub for technologies such as artificial intelligence, cyber security, data analytics and a leading manufacturer of internet-connected devices and services. Besides fintech, healthcare is also seen as one of the fastest growing sectors in India, forecast to be valued at over $280 billion by 2020. Against the backdrop of this growth potential, the UK-India Tech Partnership should start registering some strong results over and above the traditional London launchpad.