US investors pounce on UK tech start-ups ahead of national security overhaul

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U.S. investors launched an unprecedented raid on British tech firms last year, according to figures compiled ahead of the biggest overhaul of foreign takeovers in two decades.

A total of 130 UK tech companies were acquired by US firms between January and mid-December 2021, according to data from start-up monitor Beauhurst, down from 87 the year before and above the previous record of 105 in 2018. .

While the numbers are seen as a sign that Britain is emerging as a hub for start-up creation, they can also raise concerns that promising domestic companies will be sold before they can expand their business. full potential.

This comes just before the entry into force of a new national security law that will allow ministers to intervene in much smaller agreements.

At present, the government cannot review takeovers of companies with turnover of less than £ 70million per year in most sectors, limiting its ability to prevent promising players are caught before they reach this stage.

The new law, which comes into effect on Tuesday, will remove that threshold and require companies of all sizes in areas such as advanced robotics, artificial intelligence and quantum computing to notify the sales department if they are sold to a buyer. foreigner.

While Tory MPs are particularly concerned about the risks posed by Chinese acquisitions, the Covid crisis has sparked new interest in national resilience, which has also prompted many to want to keep UK companies out of corporate ownership. allies such as the United States.

Tobias Ellwood, Conservative Chairman of the Defense Select Committee, said: “In the global push to become more strategically independent after Covid, America is doing an incredible job at the expense of Britain.

“We must recognize the impact this has on our own capabilities and our sovereign strength.

“This flies in the face of the government’s wise long-term ambition to become a high-tech superpower. This ambition is not supported by the current one. let it be the attitude of allowing our major high-tech companies to be bought in this way. “

US firms are the biggest foreign acquirers of UK tech firms, while transatlantic venture capital investment has also skyrocketed in recent years.

Important offers this year included Snapchat buyout of WaveOptics for $ 500million (£ 374million), which designs technology for augmented reality glasses, and Fortnite-maker Epic Games’ acquisition of Mediatonic, developer of the hit video game Fall Guys.


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